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10 More Year-End Planning Tips To Slash Your 2022 Taxes

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Our tips are designed to make you think about how you could reduce your tax bill for 2022. They’re reminders about ways to cut your federal tax bill by December 31, 2022 in specific situations of interest to business owners, doctors, and employees in executive management as well as middle managers, teachers, and other hard-working lifelong retirement investors.

  1. If you are due a bonus by the end of the year, determine whether it will push you into a higher tax bracket and take steps to reduce income.
  2. If you are due for a bonus and can delay it until next year to reduce your 2022 taxable income, remember you have until April 17, 2023 to make a contribution to an IRA.
  3. Depressed stock prices present an opportunity to consider selling a concentrated stock position and reinvesting the proceeds in a diversified group of asset classes.
  4. Did you realize an investment loss in 2022, and can you apply the loss against a gain to reduce your total capital gains taxes?
  5. Because up to $3,000 of long-term capital losses fully offsets up to $3,000 of ordinary income, is there an investment loss you can realize?
  6. If your employer sponsors a flexible spending account, maximize it by paying for health insurance co-pays or deductibles, and qualified medical expenses, which you pay with pre-tax dollars.
  7. If you are expecting a new child, grandchild, marriage of a child or grandchild, or life transition next year, act quickly and strategically to make gifts and pay expenses expected next year tax-efficiently before 2022 ends.
  8. If you own a business and want to accelerate savings for retirement, a defined benefit (DB) plan allows higher contributions to a federal qualified retirement plan than an IRA, but DB plans are subject to complex tax and actuarial rules.
  9. Are your beneficiary designations on IRA, 401(k) or QRP accounts still in accordance with your wishes?
  10. Do you need an appointment to review your year-end tax situation with us?
2022 is an unusual year-end tax planning season. The pace of reform of federal tax laws has increased in the last several decades and accelerated since the pandemic struck. In addition, simplification seems like a long-lost goal in recent tax reform legislation.

For example, in February 2022, rules implementing the SECURE Act, which was signed into law December 2019, changed a highly technical part of the Internal Revenue Code affecting distributions from federally qualified retirement plans (QRPs) and IRAs, and will change retirement funding and estate planning decisions for millions of Americans. Meanwhile, stocks were up and down in recent months and may stay volatile through the end of 2022, which creates opportunities to realize gains and offset them by taking losses.

Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances.
The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.

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This article was written by a professional financial journalist for Financial Planners and is not intended as legal or investment advice.

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