The Notes

In the last few days of 2023, it’s worth considering certain tax strategies to help mininize your tax liabilities:

1. Maximize Retirement Contributions: Contribute up to $22,500 to your 401(k) or $6,500 to a Traditional/ROTH IRA. This not only lowers your taxable income for the current year but also helps you save for the future.
2. Harvest Tax Losses: Consider selling investments that have incurred losses to offset capital gains. This strategy, known as tax loss harvesting, can reduce your overall capital gains tax liability.
3. Use Flexible Spending Accounts (FSAs): If you have a Health FSA or Dependent Care FSA, make sure to utilize the funds you’ve contributed before they expire at the end of the year. These contributions are made on a pre-tax basis.
4. Contribute to a Health Saving Account (HSA): If you have an HSA and are eligible, contribute up to the maximum allowed amount, which is $3,850 for singles or $7,750 for qualified families. HSA contributions are tax-deductible and can be used for qualified medical expenses.
5. Gift Tax Exclusion: Keep in mind that each individual can give a gift tax exclusion of up to $17,000 to other individuals, such as family members.
6. Accelerate Deductions: If you anticipate higher income in 2023, consider moving deductions into the current year. This may involve prepaying certain deductible expenses, such as mortgage interest or property taxes.