What has changed for you in 2023? This year has been as complicated as learning a new dance for some investors. Did you start a new job or leave a job behind? That’s one step. Did you remarry? There’s another step. Did you retire? That’s practically a pirouette. If notable changes occurred in your personal or professional life, you might want to review your finances before this year ends and 2024 begins. Proving that you have all the right moves in 2023 might put you in a better position to tango with 2024.
Even if this year has been relatively uneventful, the end of the year is still an excellent time to get cracking and see where you can manage your overall personal finances.
Keep in mind that this article is for informational purposes and is not a replacement for real-life advice. Please consult your tax, legal, and accounting professionals before modifying your tax strategy.
Do you engage in tax-loss harvesting? That’s the practice of taking capital losses (selling securities worth less than what you first paid for them) to manage capital gains. If you are thinking about this move, consider seeking some guidance from a professional who can provide insights.1
You could even take it a step further. Consider that you can deduct up to $3,000 of capital losses over capital gains from ordinary income. You can carry any remaining capital losses above that amount forward to offset capital gains in upcoming years.1
Do you want to itemize deductions? You may want to take the standard deduction for the 2023 tax year, which has risen to $13,850 for single filers and $27,700 for joint. If you think it might be better for you to itemize, now would be an excellent time to get the receipts and assorted paperwork together.2
Are you thinking of gifting? How about donating to a qualified charity or non-profit organization before the ends? Your gift may qualify as a tax deduction. For some gifts, you might need to itemize deductions using Schedule A.3
While we’re on the topic of year-end moves, why not take a moment to review a portion of your estate strategy? Specifically, take a look at your beneficiary designations. If you haven’t checked them for some time, double-check that these assets are structured to go where you want them to go, should you pass away. Lastly, look at your will to ensure it remains valid and up-to-date.
Check on the amount you have withheld. If you discover that you have withheld too little on your W-4 form, you may need to adjust your withholding before the year ends.
What can you do before ringing in the New Year? New Year’s Eve may put you in a dancing mood, eager to say goodbye to the old year and welcome 2024. Before you put on your dancing shoes, consider speaking with a financial or tax professional. Do it now rather than in February or March. Little year-end moves might help you improve your short-term and long-term financial situation.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1. Investopedia.com, March 6, 2022
2. IRS.gov, December 15. 2021
3. IRS.gov, May 2, 2022
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