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Year-End Planning Considerations (2023)

| November 15, 2023

As year-end quickly approaches and we’re in the midst of open enrollment for many employer benefits, it’s time to think about some planning opportunities and contribution changes. Today, we’re going to hit on a variety of topics in brief. We’ll introduce the change and then give just one or two sentences about ways you may want to think about these changes. If you want to explore any of these in greater detail as they relate to your own financial plan, we invite you to reach out to schedule a time to chat.


As is common, contribution limits on retirement accounts and health savings accounts are being adjusted upward for 2024. Here is a chart highlighting the most relevant changes:

For a full list of all contribution limits and their applicable code sections, please reference this link from our friends at Empower.

Planning implication

If you can afford to do so, we encourage you to annually try to increase your contribution percentage to your retirement accounts. You can manually make this adjustment or use the auto-escalate feature available on most workplace accounts. If you are already at the max, you simply need to work with your employer and plan recordkeeper (workplace accounts) or us (IRA, SEP, HSA, etc.) to ensure your contributions are adjusted to capture the new max amounts.


In addition, the tax brackets for 2024 are seeing some updates, and things like the standard deduction are increasing concurrently. These annual adjustments help ensure that inflation doesn’t cause inadvertent effective tax hikes on individuals and families.

Compare this with 2023…

And here is info on the changes to the standard deduction:

Planning implication

Because these are adjusted for inflation, they should not have a tremendous impact on your tax planning considerations. However, we always welcome the opportunity to help you think about minimizing your tax burden. We’ll touch on a few other tax topics below.


Much of what we’re going to discuss below involves tax planning considerations. To properly tax plan, it’s critical that you understand current tax rates and how marginal tax rates work. Regarding the latter, your marginal rate is not the same as your effective rate, as your first dollars of income are taxed at lower rates than your last dollars. For example, in a case I looked at last week, the client was in the 32% marginal bracket and yet had a 22% effective rate on their overall income. Here is a link to key information on 2023 taxes, and we invite you to contact us if you have questions on how marginal taxation works.

Roth conversions – This is one we highlight at every year-end, as it may provide opportunities to meaningfully save on taxes over the long-term. There is no blanket advice that applies here, as many factors go into deciding whether a Roth conversion is appropriate for you, especially if you are already in retirement. This includes considering how your increased Adjusted Gross Income (AGI) resulting from the conversion may impact things like Social Security taxation, Medicare Part B and D premiums, and more. Also, remember from this post a few weeks ago that tax rates may increase substantially at the end of 2025 with the looming expiration of the Tax Cuts and Jobs Act, making 2023-2025 an optimal time to complete these Roth conversions. Please reach out for a personalized evaluation of whether this is the right move for you (and how much).

Charitable giving – Whether giving from cash, appreciated assets, or your IRA (Qualified Charitable Distributions), year-end is a great time to consider your giving plan and how best to utilize your generosity to reduce your 2023 tax bill. If you want to be able to deduct your giving on your 2023 tax return, the gifts must be completed by December 31st. If you do not typically itemize thanks to the very high standard deduction but do wish to continue your financial generosity, you may consider “bunching” your giving to help lower your tax bill. This is typically done in conjunction with a Donor Advised Fund. In addition, bunching your giving can be a great way to make a Roth conversion even more effective, as this giving offsets the added tax burden brought on by the conversion.

Non-charitable giving – While it may seem hard to believe, your kids are not qualified charities…but you may still desire to give meaningfully to them (or to others) as a very effective means of estate tax planning. You can give $17,000 per person to each beneficiary in 2023 (increasing to $18,000 next year) via the annual gift tax exclusion amount. Gifts above this amount are certainly permissible, and you can avoid gift taxes on these gifts by filing a gift tax return and claiming part of your Lifetime Exemption Amount (~$12.9 million for 2023). This has become even more timely with the looming expiration of the “Tax Cuts and Jobs Act” tax rates, which includes this expansion of the Lifetime Exemption Amount.

Note that this gifting can also include funding a 529 plan for your children, grandchildren, or others. Gift tax rules apply to these contributions, with one notable exception that allows you to “super fund” a 529 in certain circumstances. Reach out if you want to learn more!

Tax-loss harvesting – Applicable only to non-retirement accounts, this is a way of helping reduce your 2023 (and potentially future) tax burden. It involves selling an asset that is currently sitting on an unrealized capital loss. You can then immediately buy another security to take its place, so long as that replacement security is not substantially identical (you cannot buy a substantially identical security within 30 days before and after – this is called the “wash sale” rule). If we manage your non-retirement account, we will be actively pursuing smart tax loss opportunities on your behalf. If you have an account outside our management, you are welcome to consult with us to ensure this is done properly. Also, if you would like a refresher on how losses are utilized on your tax return, please reach out. It’s a bit more to explain than what we have room for here today.

Note that in the aftermath of 2022’s market downturn, many of you are likely sitting on carryforward losses. These can be carried forward indefinitely, and you’ll use them each year to offset gains from that year. Be sure you factor those in as you plan for your 2023 taxes. Here’s a link to more info on this important topic.

Tax-gain harvesting – Less discussed, but often just as powerful, is the idea of intentionally realizing long-term capital gains. Often forgotten in tax planning is the fact that some long-term capital gains are taxed at a 0% rate. By selling a security and paying a 0% rate, you can reset the cost basis, thus reducing your tax burden over the long-term. To better understand the mechanics of this, you can read this piece we published back in 2021 as part of a series on understanding capital gains taxes. Note that the applicable levels at which the 0% rate applies have adjusted slightly from what you’ll see in that 2021 write-up. These levels, which represent net taxable income (AGI minus the standard or itemized deductions) can be seen below:

Business owners may be able to transform net operating losses into tax-free income -Business owners recording a net operating loss (NOL) this year may be able to use it to their advantage. Unlike net capital losses, where taxpayers are limited to using only $3,000 annually to offset ordinary income, NOLs can generally be applied against 80% of taxable income. Some taxpayers carrying forward large NOLs can use those losses to offset the additional income from a Roth IRA conversion. The rules are complicated, and it is critical for an individual to consult with a qualified tax professional. Hat tip to our friends at Putnam for this succinct explanation of this potentially valuable maneuver.

Rebalance – Year-end provides a great time to rebalance your portfolio back to its long-term targets. It’s also a good time to review your targets against your financial plan. Have your needs changed? If they haven’t changed, simply run a rebalance and get things back in-line with your risk tolerance and stated goals. If they have changed, identify what allocation changes are needed to help you work towards your revised financial plan and then adjust your holdings accordingly.

A few other things -Things like HSA, IRA, SEP-IRA, and solo 401(k) funding can take place for 2023 after the turn of the year. These deadlines vary, but generally correspond with your tax filing deadlines (with extensions, in some cases). Reach out to us to discuss specific deadlines and whether funding these accounts for 2023 lines up with your financial plans (and is permissible under the myriad of rules that apply). Lastly, year-end is a great time to review your beneficiary designations. Along those lines, each out if you want to do a deep dive into your estate plan in the new year.


Year-end is a great time to take stock of your financial plan. You have a clear sense of your income and portfolio performance for the year, giving you the info you need to effectively perform tax and gift planning, as well as make needed adjustments to your portfolios. Of course, we didn’t write this to simply leave you to do it on your own. If you haven’t done so already (or haven’t heard from us), please reach out to schedule a time to talk through all of these year-end considerations and give your financial plan a thorough review as we head into the new year.