2023 Year End Tax Planning Checklist

by | Nov 2, 2023 | Tax Planning

As we approach the end of 2023, here are a few simple tax saving tips to lighten the burden when you file your taxes next April!


Max out your 401(k)

Your max for 401(k) accounts in 2022 is $22,500 if under age 50 and $30,000 if age 50 or older. Make sure your 401(k) or workplace retirement plans are maxed. You can fund a Traditional or Roth IRA until April 15, 2024, and a SEP IRA or Solo 401(k) up until tax filing deadline plus extensions which is October 15, 2024. Read 2023 Retirement Plan Contribution Limits for more on your limits for this year.


Max out your HSA

If you’re eligible, you can contribute up to $3,850 (plus an extra $1,000 if you are age 55 or older) as an individual or $7,750 as a family to a Health Savings Account, or HSA, a rare strategy that provides a tax deduction when you contribute and tax-free withdrawals when used for qualified medical expenses. See 3 Tips to Maximize Your HSA for more.


Set up or review your retirement plan

If you are a business owner and don’t have a retirement plan, consider setting one up now to ensure you can make tax-deductible contributions for this year. If you already have a Simple IRA, 401(k), or other retirement plan, check in with your advising and tax team to see if you should make any changes for next year, which generally must be made before year end to be effective for next year.


Make charitable donations

Deductible charitable contributions must be made before year end to count for this tax year. If you’re considering selling stock to make contributions, read Using Donor Advised Funds (DAF) to Reduce Tax and Increase Giving first!


Make gifts to family and friends

You can give $17,000 to as many people as you’d like, called your annual gift exclusion, before it starts to impact your taxes. To avoid losing this year’s exclusion, gifts must be made before year end. For more tips, see Can You Gift Too Much?


Harvest losses or gains in your portfolio

Tax-loss harvesting is the practice of selling investments at a loss to reduce taxes and buying a similar investment to help ensure you don’t miss out on a gain in the meantime. If you have unused investment losses from prior years, these carry forward and can be used in the future, so also consider selling high gain investments to use up that loss budget. The Alterra team is doing this already on accounts we oversee, but make sure you check into accounts you manage on your own.

See our Tax-Loss Harvesting Guide for a thorough discussion on this topic. For more on taxes and your portfolio, see our Guide to Tax Efficient Investing.


Explore Roth conversions

If you’re retired and have plenty of resources to fund your dream life, you may be starting to think about the best ways to impact future generations. One strategy is to convert pre-tax IRA dollars to a Roth IRA if you plan to leave these funds as an inheritance. You’ll pay tax this year, but funds now grow tax-free and distributions – including growth – are tax-free for your beneficiary.


Make sure you’ve taken any Required Minimum Distributions

If you’re 72 or older and have a pre-tax retirement plan, or if you inherited an IRA before 2020, you must distribute a portion of your pre-tax retirement accounts each year or face a steep tax penalty – 50% of the undistributed required amount. The Alterra team is doing this for accounts we oversee but keep this in mind if you have other pre-tax retirement accounts. If you’re frustrated that you’re forced to take this out because you don’t need it, read I Don’t Need My RMDs…What Should I Do?


Consider a year-end tax review

This is a good time to send investment gain/loss reports and income estimates to your CPA to see if you’ve paid enough taxes or if you might owe more.

While this is not an exhaustive list, these are a few ideas to help ensure you don’t miss meaningful year-end deadlines for your financial planning. Please feel free to reach out with questions…we’re here to help!

Converting a traditional IRA to a Roth IRA is a taxable event, increasing taxable income, which may have several consequences including, but not limited to, a need for additional tax withholding, the loss of certain tax deductions and credits, higher taxes on Social Security benefits, and higher Medicare premiums. Consult with a qualified tax advisor before making any decisions regarding your IRA. Tax services are not offered by Lion Street Financial, LLC or Alterra Advisors.

Alterra Advisors - Josh Whelan

Ryan Colis

Partner, Financial Advisor

About the Author

Ryan is a problem solver. He has a distinct ability to create a simple solution for very complex puzzles. So, naturally, he’s an integral part of our team. His favorite part of his role at Alterra is the analysis – whether analyzing a financial plan or reviewing an investment portfolio. However, the profession allows him to share that passion with clients by helping them navigate financial complexities as they collaborate on achieving their personal and financial goals.

After completing his undergraduate degree in Business Management, Ryan and Grant met by chance, developed a rapport and have been working together ever since. Ryan has continued his formal training in finance by earning his CFP and CFA designations.

The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.

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