2024 End-of-Year Tax Secrets: Simple Tips to Keep More Cash in Your Pocket

As the year draws to a close, now is a great time to review your finances and implement strategies to help minimize your tax liability. Being proactive with tax planning can make a significant difference in your overall financial health, especially as you near retirement. Below are some key ideas to consider before the end of the year:

1. Review Your Investments

If you’ve experienced capital gains, consider offsetting them by selling investments with capital losses, a process known as tax-loss harvesting. This can help reduce your taxable income.

2. Maximize Retirement Contributions

Review what you’ve contributed to your retirement accounts, such as 401(k)s, 403(b)s, and IRAs, and if possible, increase your contributions before December 31st. Here are the contribution limits for 2024:

• 401(k) and 403(b): Up to $23,000 (if 50 or older, up to $7,500 more)
• IRAs & Roth IRAs: $7,000 (if 50 or older, $8,000)

Even if you can’t reach the maximum, aim to contribute at least the amount your employer will match.

3. Review Required Minimum Distributions (RMDs)

If you’re over age 73, make sure you have taken your RMDs to avoid a 25% penalty. For those aged 70½ or older, consider a Qualified Charitable Distribution (QCD) to satisfy your RMD without increasing your taxable income.

4. Consider a Roth Conversion

Converting traditional retirement funds to a Roth IRA may make sense, depending on your tax situation. While the conversion creates taxable income now, it allows for tax-free growth and withdrawals in the future.

5. Make the Most of Health Savings Accounts (HSAs)

If you have an HSA and are 55 or older, you can take advantage of catch-up contributions. HSA funds grow tax-free and can be used for qualified medical expenses, making them a powerful savings tool.

Get Expert Help to Maximize Your Tax Savings This Year

Year-end tax strategies should be aligned with your overall financial goals and tailored to your specific situation. Consulting a financial advisor can help ensure that you implement these strategies effectively, maximizing your benefits. Remember that tax laws and regulations can change, so it’s important to consult us or your tax professional to ensure you make the best decisions for your specific situation.

If you have questions about Roth conversions, QCDs, or your retirement plan in general, we’d be happy to help. Contact us at 801-465-6990 for personalized guidance as you wrap up your year-end planning.

Scott Wharton

Retirement Solutions

For informational purposes only.  Investment advisory services through Retirement Solutions Investments, Inc.  Insurance through Retirement Solutions, Inc.  Additional information at www.rsutah.com.