Taxpayers have plenty to be concerned about in 2024…
Economic uncertainty.
Inflation and interest rates.
A contentious 2024 presidential election that could inject even more uncertainty and market drama.
On top of all that, many of the provisions in the 2017 Tax Cuts and Jobs Act are scheduled to expire next year unless lawmakers extend them.1
What could that mean for your taxes?
What can you do?
The current tax rates might be the lowest you’ll see for the rest of your life, and I want you to make the most of them.
It’s more important than ever to make sure you’re taking advantage of every tax edge you possibly can this year.
Acting now could be critical because you might not have the ability to seize these opportunities in future tax years.
I want to emphasize that this is a limited opportunity to leverage current laws. The 2017 rules are scheduled to expire in 2025 (if they don’t disappear sooner under a new administration), and most taxpayers will see a tax hike.1
Fortunately, there are strategies you can capture right now to make sure you don’t pay more than your fair share in taxes. But you should act quickly, because they could soon disappear completely.
This tax-savvy guide is designed for high earners just like you who are concerned about whether their retirement portfolios will start sinking in an uncertain future that could include higher taxes.
If you’re asking yourself questions like:
Keep reading…
One of the tax-savviest moves you can make in 2024 is to optimize your contributions—especially before April 15, because it’s your last opportunity to make some last-minute retroactive contributions for 2023 that could immediately lower the taxes you pay.
And the savvy tax moves can go way beyond your retirement plan.
Have you squeezed every ounce of juice from ALL your tax-deferral opportunities?
Critical questions to ask yourself include:
Have you checked for embedded capital gains in your investments? If so, you may want to consider taking action now, before the tax hammer gets even heavier.
Harvesting them now under a favorable tax regime where the top rate is 20% could be beneficial if capital gains lose their favorable tax treatment in the near future.
The top ordinary income tax rate could rise up to nearly 40%... just about double the current highest capital gains rate.1
Taxes are just one part of your overall investment picture, but it could offer an opportunity to make tactical investment changes where prudent.
Critical questions to ask yourself include:
Have you maximized your opportunities to create tax-free income? Currently, savvy investors who have the ability to use a mega-backdoor Roth are doing so by adding after-tax contributions to their 401(k)s and then converting to Roth IRAs.
This strategy could be eliminated forever under future administrations, so if a mega-backdoor Roth strategy sounds interesting, consider it before it’s too late.
With your 2023 tax and investment documents in hand, we can look for favorable Roth conversion opportunities under the current rules.
Not all 401(k) plans allow for this strategy. However, if you have pretax money that you put in any type of retirement account, you may still want to convert some of it to a Roth (in moderation). The entire amount of the conversion is taxable income to you, but it may still make sense in view of your overall tax strategy.
Critical questions to ask yourself include:
Under current tax laws, it’s harder to use itemized deductions to save on your taxes. The standard deduction for taxpayers who are married filing jointly is $29,200 and $14,600 for single filers in 2024.3 That puts the bar a little higher each year, but savvy taxpayers know how to combine deductions to make it past the standard deduction threshold.
2024 and 2025 may be critical years for this technique as we don’t know what will happen to deductions if current laws expire.
How can you use this opportunity in 2024? Now’s the perfect time to take a look at last year’s expenses and plan ahead for the following opportunities:
Critical questions to ask yourself include:
Depending on what happens when current tax laws expire, it’s possible that you’re experiencing the lowest tax bracket of your life.
If that’s the case, then it makes sense to maximize the amount of income you have this year without pushing your income into the next higher tax bracket.
Yes, it could mean paying more in tax this year than you would otherwise. And that's not fun. But paying tax on the highest income in your current tax bracket could mean creating less of a tax exposure compared to when your tax bracket (and marginal tax rate) are higher.
With your 2023 documents in hand, it’s critical to carefully coordinate a strategy with your CPA and financial professional to avoid unforeseen complications.
You might want to consider these potential strategies:
Critical questions to ask yourself include:
You’re a high earner who’s worked hard and deserves to pay no more than your fair share. And right now, with all the market and political uncertainties, it’s very hard to know what the future may hold.
There are currently opportunities for tax savings––but they could disappear at any time. Many are expected to expire in 2025, making tax strategies especially critical this year.
Some of these maneuvers are a little more complex and require the help of knowledgeable professionals to make sure that you don’t end up on the wrong side of your current tax bracket—or the IRS, for that matter.
In addition to developing the strategy, you also need to execute it at the right time. We don’t know exactly when these opportunities will expire; and when they do, some of them may disappear forever.
You’ve already started to build a significant fund for your retirement years, and by consulting with competent specialists, you can keep more of it rather than handing it over to the IRS.
You’ve made a wise choice by reading through this guide to find out what opportunities you could be missing out on. Take the next step by contacting us for your complimentary 1:1 Tax Opportunities Session today. Or, find time on the calendar below to schedule a 15 minute call with one of our financial advisors:
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