Tax Tips

As 2024 nears its end, there is still time to lower your income taxes. Strategic moves like stock trades, charitable donations, and retirement contributions can significantly impact how much you owe. With certain provisions of the Tax Cuts and Jobs Act set to expire after 2025—potentially leading to higher taxes for some—now is the time to maximize available tax breaks. Here are six year-end tax tips to help lower your 2024 tax liability and position yourself for future financial success. 
 
Contribute to tax-advantaged accounts
You have until April 15, 2025, to contribute to an IRA for 2024, but workplace retirement plan contributions (e.g., 401(k), 403(b)) must be made by December 31, 2024. The 2024 contribution limit is $23,000, with an additional $7,500 catch-up contribution for those 50 or older.

Turn investment losses into tax gains
Tax-loss harvesting lets you sell underperforming investments to offset gains, reducing your tax bill. Any unused losses can carry forward to future years or offset up to $3,000 of ordinary income annually ($1,500 if married filing separately), helping you keep more of your money.

Consider a Roth conversion
A Roth conversion lets you transfer funds from a traditional IRA or workplace plan to a Roth IRA, where the money grows and is withdrawn tax-free. With tax rates set to rise in 2026, converting now could result in long-term tax savings.

Consider gifting to loved ones
You can gift up to $18,000 per person annually ($19,000 in 2025) without triggering taxes, reducing your taxable estate. Married couples can gift double this amount, and these gifts do not affect your lifetime estate exemption.

Consider itemizing
Itemizable deductions include medical expenses, mortgage interest, state taxes, charitable contributions, and disaster losses. If these exceed the 2024 standard deduction ($29,200 for couples, $14,600 for singles), consider itemizing. Some deductions, such as medical costs, have limits, so paying expenses before year-end may help maximize savings.

Donate appreciated assets
Itemizers can donate appreciated assets held for over a year to qualified charities, deducting the fair market value without incurring capital gains tax. Donations are subject to a 30% adjusted gross income (AGI) limit, with unused amounts eligible for a 5-year carryforward. Exceptions may apply to certain assets, like short-term holdings or publicly traded stocks

Make sure to consult your tax advisor to determine which options align with your financial goals and situation.
 
RJS LAW and its experienced tax attorneys have counseled clients in all areas of tax and estate planning.  From tax planning, to audits, and the creation and servicing of Trust and Probate, RJS LAW is your trusted advisor.  For a no-cost consultation, please call 619-595-1655 or contact us on the web at RJS LAW.