We\u2019re here to help explain tax and financial planning<\/a> opportunities. Please contact us at your earliest convenience to discuss your situation so we can develop a customized plan. In the meantime, here\u2019s a look at some issues impacting individuals to consider as we approach year-end.<\/p>\n\n\n\n Charitable Contribution Planning<\/strong><\/p>\n\n\n\n If you are planning to donate to a charity, it\u2019s likely better to make your contribution before the end of the year to potentially save on taxes. There are many tax planning strategies<\/a> we can discuss with you about charitable giving. For example, consider donating appreciated assets that have been held for more than one year, rather than cash. Opening and funding a donor advised fund (DAF) is appealing to many as it allows for a tax-deductible gift in the current year and the ability to dole out those funds to charities over multiple years. Qualified charitable distributions (QCDs) are another option for certain older taxpayers who don\u2019t typically itemize on their tax returns.<\/p>\n\n\n\n Last year, individuals who did not itemize their deductions could take a deduction of up to $300 ($600 for joint filers). However, this opportunity is no longer available for tax year 2022. Also, note that it\u2019s important to have adequate documentation of all donations, including a letter from the charity for donations of $250 or more.<\/p>\n\n\n\n Required Minimum Distributions (RMDs)<\/strong><\/p>\n\n\n\n You cannot keep retirement funds in your account indefinitely. RMDs are the minimum amount you must annually withdraw from your retirement accounts once you reach a certain age (generally age 72). Failure to do so can result in penalties. And withdrawals usually have tax impacts. There are also opportunities to roll retirement funds to a qualified charity to satisfy the RMD without incurring taxes. Also, note that the IRS has issued new life expectancy tables effective for the 2022 tax year, resulting in lower RMD amounts. Your financial advisor<\/a> can help calculate any RMDs to take this year and plan for any tax exposure.<\/p>\n\n\n\n Digital Assets and Virtual Currency<\/strong><\/p>\n\n\n\n Digital assets are defined under the U.S. income tax rules as any digital representation of value that may function as a medium of exchange, a unit of account and\/or a store of value. Digital assets may include virtual currencies such as Bitcoin and Ether, Stablecoins such as Tether and USD Coin (USDC) and non-fungible tokens (NFTs).<\/p>\n\n\n\n The sale or exchange of virtual currencies, the use of such currencies to pay for goods or services or holding such currencies as an investment, generally have tax impacts \u2013\u2013 and the IRS continues to increase its scrutiny in this area. We can help you understand any tax and investment consequences.<\/p>\n\n\n\n Energy Tax Credits<\/strong><\/p>\n\n\n\n From electric vehicles<\/a> to solar panels<\/a>, \u201cgoing green\u201d continues to provide tax incentives. The Inflation Reduction Act of 2022 included new and newly expanded tax credits for solar panels, electric vehicles and energy-efficient home improvements. The rules are complex, and some elements of the law are not in effect until 2023, so careful research and planning now can be beneficial.<\/p>\n\n\n\n Additional Tax and Financial Planning Considerations<\/strong><\/p>\n\n\n\n We recommend you review your retirement plans at least annually. That includes making the most of tax-advantaged retirement saving options, such as traditional individual retirement accounts (IRAs), Roth IRAs and company retirement plans. It\u2019s also advisable to take advantage of health savings accounts (HSAs) that can help you reduce your taxes and save for medical-related expenses.<\/p>\n\n\n\n Also, if you took a CARES Act withdrawal (up to $100,000 in 2020) from your retirement account, you’ll need to report the final one-third amount on your 2022 return (unless you elected to report the entire distribution in 2020 or have re-contributed the funds to a retirement account). If you took a distribution, you could return all or part of the distribution to a retirement account within three years, which will be a date in 2023. We would like to work with you to strategize a plan to help restore and build your retirement savings and determine whether you\u2019re on target to reach your goals.<\/p>\n\n\n\n Here are a few more tax and financial planning items to discuss with us:<\/p>\n\n\n\n Life Changes<\/strong> \u2013\u2013 Let us know about any major changes in your life such as marriages or divorces, births or deaths in the family, job or employment changes, starting a business and significant expenditures (real estate purchases, college tuition payments, etc.).<\/p>\n\n\n\n Capital Gains\/Losses<\/strong> \u2013\u2013 Consider tax benefits related to using capital losses to offset realized gains \u2013\u2013 and move any gains to the lowest tax brackets, if possible. Also, consider selling portfolio investments that are down before the end of the year. Net capital losses can offset up to $3,000 of the current year\u2019s ordinary income. The unused excess net capital loss can be carried forward to use in subsequent years.<\/p>\n\n\n\n Estate and Gift Tax Planning<\/strong> \u2013\u2013 Let\u2019s make sure you\u2019re appropriately planning for estate and gift tax purposes. There is an annual exclusion for gifts ($16,000 per donee in 2022, $32,000 for married couples) to help save on potential future estate taxes.<\/p>\n\n\n\n Education Planning<\/strong> \u2013\u2013 Let\u2019s consider Sec. 529 plans to help save for education; there can be income tax benefits to do so, and we can help you with any questions.<\/p>\n\n\n\n Roth IRA Conversions<\/strong> \u2013\u2013 Let\u2019s discuss and weigh the benefits of converting your traditional IRA to a Roth IRA to lock in lower tax rates on some of your pre-tax retirement accounts.<\/p>\n\n\n\n Estimated Tax Payments<\/strong> \u2013\u2013 Let\u2019s review 2023 withholding and estimated tax payments.<\/p>\n\n\n\n Year-End Planning Equals Fewer Surprises<\/strong><\/p>\n\n\n\n Whether it\u2019s working toward a tax-optimized retirement or getting answers to your tax and financial planning questions, we\u2019re here for you. Please contact our office today at (972) 503-1040 to set up a year-end review. As always, planning ahead can help you minimize your tax bill and position you for greater success.<\/p>\n\n\n\n <\/a> <\/a><\/a><\/p>\n\n\n\n No Professional Advice, Client Relationship, or Reliance on Information<\/strong><\/p>\n\n\n\n Please note that any information or content on our Website, or any forms or tools on our Website which allow you to submit information or make calculations, and your use thereof, are not intended to provide any kind of professional advice, consultation or service, including but not limited to, legal, accounting, tax, or business advice. Nor does any such information, content, forms, or tools, or your use thereof or reliance thereon, create or constitute an attorney\/client, accountant\/client, or consultant\/client relationship. You should therefore not use our Website or reliance on any information, content, forms, or tools on our Website as a substitute for any kind of professional advice. Rather, you should consult with a licensed professional, including one employed by our Company, for any accounting or tax questions you may have. You agree that we will not be liable to you or to any third party to the extent you treat or consider any information, content, forms, or tools on our Website as constituting any kind of professional advice. The information and content, including but not limited to forms and tools, presented on or made available through our Website are made available solely for general information purposes. We, therefore, do not warrant the accuracy, completeness or usefulness of any such information, content, forms, or tools, and any reliance you place on the same is strictly at your own risk. We disclaim all liability and responsibility arising from any reliance placed on such materials by you or any other visitor to our Website, or by anyone who may be informed of any of its content.<\/p>\n\n\n\n
![\"Lets](\"https:\/\/blog.bh-co.com\/hs-fs\/hubfs\/Lets%20Talk.png?width=933&height=469&name=Lets%20Talk.png\")
<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"