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Complete Your Year-End Planning Thumbnail

Complete Your Year-End Planning

As we wrap up the last month of 2023, below is a short list of strategies to consider when completing your year-end planning.

Sell portfolio positions in taxable accounts that are at a loss.

These losses can offset realized capital gains. Any loss in excess of capital gains is deductible against your ordinary income up to $3,000 per year. Any loss of more than $3,000 can be carried forward and used against future capital gains.

Fully fund your retirement contributions.

Make sure that you have maxed out your 401(k) deferral amounts - $22,500 with an additional $7,500 catch-up limit if age 50 or older.

Maximize Health Savings Account (HSA) contributions.

The single contribution rate is $3,850 and the family contribution rate is $7,750. You can contribute an additional $1,000 if age 55 or older.

Maximize charitable contributions.

Consider gifting your long-term appreciated stock or mutual funds to a charity. You can avoid capital gains taxes on these positions and receive a deduction against your ordinary income based on the fair market value of the stock or mutual fund. Note: Due to the change in itemized deductions and the standard deduction, it may make sense to bunch your charitable contributions into a single year to maximize your deduction. You can also use a Donor Advised Fund to make charitable contributions in a single year or in high-income years, and then distribute the funds from the Donor Advised Fund to your favorite charities over several years.

Keep track of your additional sales tax on home additions and car purchases.

If you have made large ticket purchases during the year, you may be able to get an additional deduction on your tax return. Your total deduction for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if married filing separately).

We are here to help

If you have questions or need assistance with any of the strategies listed, please contact your Soundmark advisor.

This report is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing. Soundmark Wealth Management, LLC, its advisors and its affiliates do not provide tax or accounting services. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax or accounting advice. Please consult with your tax advisor prior to engaging in any transaction.
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