Your 2023 Year-End Planning Checklist

It may be easy to forget that we’re nearing the end of the year. Even during the busy end-of-year rush, it’s a good time to reevaluate your 2023 finances and turn an eye toward 2024. What may be possible to improve and streamline your 2024 budget? Here are year-end planning steps that may make your 2024 finances run more smoothly.

Estimate Your 2023 Taxes

Here are the changing items of most interest to taxpayers for 2023 taxes.1

Standard Deduction: The standard deduction for married couples filing jointly is $27,700, $1,800 more than in 2022. For single and married individuals filing separately, it goes up to $13,850 for 2023, an increase of $900. For heads of households, it is $20,800, an increase of $1,400 from 2022.

Top Tax Rate: For 2023, the maximum rate remains 37% for individual single taxpayers with incomes above $578,125 ($693,750 for married couples filing jointly).

Marginal Tax Rates:

  • 35% for incomes above $231,250 ($462,500 – married couples filing jointly)
  • 32% for incomes above $182,100 ($364,200 – married couples filing jointly)
  • 24% for incomes above $95,375 ($190,750 – married couples filing jointly)
  • 22% for incomes above $44,725 ($89,450 – married couples filing jointly)
  • 12% for incomes above $11,000 ($22,000 – married couples filing jointly)
  • The lowest rate is 10% for single individuals with incomes of $11,000 or less ($22,000 – married couples filing jointly).

Earned Income Tax Credit: The maximum Earned Income Tax Credit amount is $7,430 for qualifying taxpayers who have three or more qualifying children, up from $6,935 in 2022.

It is important to quickly estimate your tax liability to figure out if your withholdings or estimated payments remain on track. You may still make estimated payments to your 2023 taxes through January 16, 2024. If you’ve been under-withholding or earned more income than expected, you still have several months to prepare for your April 2024 tax payment.

Evaluate Your Asset Allocation

Each investor has a model portfolio: the percentage of large-cap, mid-cap, small-cap, and international stocks, as well as bonds and cash instruments they want their portfolio to contain. Every portfolio may shift over time as certain sectors gain value while others stagnate. If it’s been a while since you looked at your asset allocation, the year-end review may be a great time to review your investments to evaluate if they still represent your needs and goals.

Check Progress On Your Long-Term Goals

Whether your goals include saving for retirement, sending children to college, buying a new home, or stepping back from a stressful career into a lower-paying one, regular “goal checkups” to assess your progress are essential. By taking snapshots of your income, spending, investment balances, and net worth on a monthly or annual basis, you may get a better idea of how long it may take you to save up for certain goals or how much investment income you may be able to spare without tapping into your principal.

Your year-end review may also present a good time to set target goals for year-end 2024. Next year, you may have an even better point of reference to see how much progress you’ve made.



1 IRS provides tax inflation adjustments for tax year 2023

2 When Are Estimated Tax Payments Due in 2023?









Important Disclosures

Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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How to Prepare Your Tax Strategy

Dollar Bills - Puckett and Sturgill Financial Group

As tax season looms closer, you’re probably looking at your options for saving the most money and maybe even getting a decent return on the other side of things.

With tax law changes and your own personal income and investment records, this year could be shaping up to be a lot different than past years. If you think this might be the case, you’ll want to prepare yourself to minimize the shock of large fluctuations – good or bad – on your bottom line

While you gather your information for filing, consider some of the following ways to prepare your tax strategy this spring.

Review how the Tax Act Might Impact Your Bottom Line

The 2018 tax reform bill has changed a lot about filing taxes in 2019. For one, tax brackets and rates have been adjusted, which you may have already noticed through a reduction in your 2018 paycheck withholdings.

Additionally, the standard deduction has doubled to $24,000 for married couples filing jointly ($12,000 for single filers). This might make things easier when it comes to filing deductions – if you estimate your deductions to be less than the new threshold, you may not need to bother with itemized deductions. This is an area where you may want to defer to a tax professional for the best recommendation for your income specifically.

There are other changes to the tax code, including benefits for parents of dependent children, changes to mortgage tax credits, and adjustments to healthcare reporting and regulations. Some or all of these changes may impact your bottom line, so take care to do your homework if you fall into an affected category.

Mind Your Tax Rates on Investments and Sales

Your investment income will contribute to your final tax obligation, but there are ways that you can invest wisely to avoid taking a big loss when tax time rolls around. If you’ve made any sales during the previous year, you’ll want to take careful note of regulations surrounding investment sales in order to avoid incurring tax penalties.

If you have earned returns in the form of capital gains, you’ll owe a greater percentage in taxes this year. However, you may be able to offset these gains with offsets found elsewhere in your portfolio or regular income.

Take State Regulations into Account

Last, but not least, take some time to understand nuances in the tax code for the state in which you’re filing. Each state has tax laws that vary from the federal regulations and they could mean a significant loss or gain, depending on how well you prepare.

For example, in the state of Maryland, there are regulations for claiming deductions, depending on how you itemized on your federal tax return. With changes to the standard deduction hitting federally this tax year, you’ll want to double check whether this difference will influence how you should claim your deductions if you want to maximize both your state and federal returns.

The best place to start with your tax strategy is with a financial professional. If you have questions about your portfolio and your 2018 tax documents, reach out to learn more about how we can help.

    This information is not indented to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.