By: Scott Van Den Berg, CFP®, ChFC®, CEPA®, AIF®, CRPS®, CMFC®, AWMA®
As we step into 2024, reflecting on the past year’s financial decisions is crucial, especially in understanding how to optimize our strategies going forward. I'd like to guide you through maximizing post-year-end contributions that can still influence your 2023 tax liabilities and set the stage for a financially successful new year.
The Importance of Early-Year Review
The beginning of the year is the perfect time to evaluate your financial strategies, particularly those relating to tax savings. While some opportunities for the previous year have passed, certain actions taken now can still impact your 2023 tax return and set a positive precedent for 2024.
One area where you can still influence your 2023 tax situation is through Individual Retirement Account (IRA) contributions.
- IRA Contributions: You have until the tax filing deadline (usually April 15) to make contributions that count toward the previous year. For 2023, the IRA contribution limit was $6,500, with a $1,000 catch-up contribution for those 50 and older.
Charitable Contributions and Donor-Advised Funds
Though direct charitable contributions typically need to be made within the calendar year to count for that year's taxes, understanding their impact is important for future planning.
- Donor-Advised Funds (DAFs): If you contributed to a DAF in 2023, now is the time to plan how those funds will be allocated to charities in 2024.
Health Savings Accounts (HSAs)
If you have a high-deductible health plan, it’s crucial to review your HSA contributions.
- HSA Review: Ensure you utilized your HSA effectively in 2023 and plan your contributions for 2024. HSAs offer significant tax advantages, including tax-deductible contributions and tax-free withdrawals for qualified medical expenses.
The start of the year is ideal for reviewing your investment portfolio and planning for any tax-loss harvesting strategies for the current year.
Education Savings – 529 Plans
Though contributions to 529 plans for education savings are typically tallied in the calendar year, early-year reviews can set the stage for consistent, planned contributions in 2024.
Investment Portfolio Adjustments
With a new year comes the opportunity to realign your investment portfolio with your current financial goals and risk tolerance, keeping in mind both the successes and lessons from the previous year.
While the clock has ticked past December 31, 2023, the strategies and decisions you make now can still have a considerable impact on your financial well-being. At Century Management Financial Advisors, we are committed to helping you navigate the complexities of post-year-end financial planning and tax strategies.
Proactive planning and timely action are important factors in putting the odds in your favor of achieving better financial outcomes and meeting your financial goals, both short-term and long-term. As we embrace 2024, let's work together to help you align your life with your wealth and enjoy the peace of mind you deserve.
Century Management ("CM") is an investment adviser registered with the US Securities and Exchange Commission. Registration does not imply a certain level of skill or training. CM is also registered as a Portfolio Manager in the Province of Ontario. More information about CM’s investment advisory services can be found in its Form ADV Part 2A and/or Form CRS, which is available upon request and also at www.centman.com. Past performance is not indicative of future results. This discussion is not intended to be investment advice and does not consider specific client objectives. CM does not provide legal or tax advice and the information herein should not be considered legal or tax advice. Please consult legal or tax professionals for specific information regarding your individual situation. CM-2023-12-21