Wealth Planning Insights | Q4 2023

We hope this update on wealth planning finds you well. As we approach the holidays, our planning team has thoroughly reviewed and summarized notable changes as well as actionable strategies to employ into the New Year.

New Contribution Limits

It is a great time to establish consistent saving habits! The IRS has spread holiday cheer of their own by issuing their annual cost of living adjustments for retirement and health savings plans, including 401(k)s and Individual Retirement Accounts (IRAs). If you are lucky enough to work for an employer that offers access to an employer-sponsored retirement plan, take advantage of it! If you lead the charge yourself as a business owner, you can save, too.

401(k), 457 and 403(b)

Simplified Employee Pension (SEP) IRA

Individual Retirement Account (Roth and Traditional)

The tax filing deadline sets the last possible date to make IRA contributions for the previous calendar year, i.e., there’s still time to make your 2023 contribution heading into the first quarter of 2024.

*Savers can expect this catch-up contribution amount to be adjusted for inflation in future years as a result of the passage of the Secure Act 2.0 legislation.

For Roth IRAs, if your Modified Adjusted Gross Income (MAGI) falls within the below ranges depending on your filing status, you may make a partial contribution.  If your MAGI, exceeds the top of the range, you are not allowed to make a contribution. In such cases, a dedicated member of our team can advise on alternative options to grow your tax-free savings strategy. A Roth conversion is a powerful option to make use of before year end.

Health Savings Account (HSA)

You have until the tax filing deadline to make HSA contributions for the previous calendar year.

Social Security & Cost-Of-Living Adjustment (COLA)

Almost 67 million Americans will be receiving a cost-of-living-adjustment in 2024 for their social security benefits.  As part of the Social Security Administration’s yearly protocol to maintain purchasing power for beneficiaries, an 3.2% COLA increase will be instituted.

Fun Fact: since initially implementing the COLA in 1975, the average annual adjustment to date is 3.77%.

Tis' the Season for Tax Preparation

Our team also wanted to share a few tax planning tips heading into year end and important timelines to be mindful of:

Accelerate or decelerate income to more effectively manage your tax liability in years when you expect taxes to be lower or higher, respectively, and engage your enrolled agent or CPA to execute these strategies.

Tax-loss harvest by shedding the ‘non-performers’ in your portfolio, especially those owned in your unmanaged portfolio assets. Remember that if your capital losses exceed your capital gains, you may use up to $3,000 in additional capital losses to reduce other types of taxable income. The opportunity to carry forward your capital losses into future years lasts indefinitely.  


- Fourth quarter 2023 estimated tax deadline: Tuesday, January 16th, 2024.

- If you are self-employed or have other income without any tax withholding (i.e., 1099), and you make quarterly estimated tax payments, this is the due date for your final quarterly payment for the 2023 tax year.

- Individual tax return deadline: Monday, April 15th, 2024 (if you’re a calendar year filer – most individuals are). Missing this deadline can result in IRS "Grinch-like" behavior with penalties and interest.

Are you filing an extension for the 2023 tax year?

- Be sure to fill out and submit Form 4868 by April 15th if you file your own taxes via Turbo Tax or other online tax preparation software. If you leverage the expertise of a tax preparer, they’ll know how to navigate this.

- Even if you choose to file an extension, you are still required to pay any taxes you may owe by the April deadline!

October 16th, 2024, will be your new delayed tax return deadline.

Tax season is usually fraught with scams! Remember that the IRS does not initiate contact with taxpayers by email, text messages, or social media to request personal or financial information.  

As a team, we are committed to providing you with the best possible guidance. If you have any questions and/or have experienced any material life events or changes, please reach out to our team to update your wealth plan.

Thank you for your confidence in our work, and we wish you and your families a wonderful Holiday season and a Happy New Year!