9 Tax-Saving Strategies for Year-End 2023: Advisors' Advice

laptop with tax icon

9. Use Roth conversions to fill up tax brackets.

Year-end is the best time to do tax planning. A few things we are considering with every client are Roth conversions and filling up lower tax brackets, donating highly appreciated securities to donor-advised funds, and making sure we fill up retirement accounts to the max if we have the extra dollars.

The benefit of Roth conversions is filling up their tax bracket now and moving to tax-free, versus waiting for the future where it may be taxed at a higher rate.

With donor-advised funds, you can donate highly appreciated securities and avoid the capital gain and get a deduction up to 30% of AGI (adjusted gross income).

Both super impactful.

For business owners, we consult on maximizing the qualified business income deduction by tinkering with salary and profit. The QBI deduction generally amounts to 20% of qualified business profits, until the owner’s adjusted gross income reaches a threshold high enough that it becomes the lesser of 50% of the owner’s W-2 wages or 20% of business profits.

— Thomas Kopelman, co-founder and financial planner, AllStreet Wealth

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