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Year-End Tax Planning: End-of-Year Tax Strategies to Maximize Your Refund

Tax Day may be on April 15, but some things can’t wait. Now is the time to start examining your 2023 tax obligations and considering actions you can take that will help you reduce your tax bill. In fact, if you’re looking to lower your tax liability, your year-end plans are critically important.

Whether you are struggling with recent losses or experiencing a year of abundance, you may be able to minimize your tax burden by taking advantage of a few key end-of-year tax strategies. Before the calendar turns to 2024, talk to an experienced accountant to determine the best year-end tax planning strategies for your unique situation.

The Importance of Year-End Tax Planning

Working with a CPA to create a tax plan helps avoid any surprises when you go to file your taxes next year. Tax planning consists of taking a look at your financials and estimating potential tax liabilities for the upcoming year.By reviewing your tax obligations at the end of the year and exploring end-of-year tax strategies relevant to your finances, you may be able to significantly minimize how much you owe come tax season. Additionally, year-end tax planning will ensure you maximize deductions and increase your tax refund.

Year-end tax planning requires careful, strategic planning, but the benefits are worth it: keeping more of your hard-earned money in hand, allocating funds to more profitable investments, and improving your overall financial portfolio.

7 End-of-Year Tax Strategies

Take advantage of these year-end tax planning strategies to lower your tax liability, increase your refund, and maximize deductions for 2023. By following these tips, you will be better prepared for the upcoming tax season.

elderly woman selecting her retirement plan on her computer

1. Maximize Contributions to Retirement Accounts

Max out contributions to pre-tax retirement accounts like traditional individual retirement accounts (IRAs) or employer-sponsored 401(k) plans. These accounts are not only a great investment in your future but also reduce your taxable income for the year.

2. Optimize
Charitable Donations

If you plan to make any charitable donations, you can deduct them from your taxes (up to 50-60% of your adjusted gross income) if they are made before the end of the year. Donating to qualified charities by December 31 is an efficient way to reduce your taxable income for that year.

analyst looking at stock market on a tablet

3. Harvest Investment

With financial markets in flux, you may be facing a higher tax bill. Lower your tax liability by “harvesting” investment losses to offset taxable gains you have realized during the year.

This process, called tax-loss harvesting, involves selling investment assets like stocks, bonds, and mutual funds at a loss, which can then be applied against capital gains in your portfolio. Contact an experienced tax professional to determine which assets to buy and sell to maximize your refund.

gloved hand of a medical professional holding a pill container with money

4. Spend Leftover Flexible Spending Account (FSA) Funds

Funds in flexible spending accounts (FSAs) are pre-tax dollars that are earmarked for medical expenses. However, come December 31, you will have to pay taxes on anything left in the account. Minimize your tax burden by using up FSA funds on approved healthcare actions such as last-minute appointments, exams, prescription refills, medical items, etc.

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5. Take Required Minimum Distributions (RMDs)

Required minimum distributions (RMDs) are the absolute minimum amounts you must withdraw from tax-deferred retirement accounts such as IRAs. If you are 72 or older, you must take the RMDs by December 31 or face steep penalties of up to 50% of the portion you failed to withdraw, significantly increasing the amount of tax you will have to pay for 2023.

6. Explore Tax Deduction Opportunities

There are a variety of tax deduction opportunities available to individuals and to small business owners that can help reduce your overall tax liability. Meet with an experienced tax professional to figure out which deductions apply to your circumstances and how to maximize your refund come Tax Day.

Fisher Accountants

7. Get Professional Advice from an Experienced Tax Accountant

Talk to a certified public account (CPA) with experience in tax compliance to determine which year-end tax planning strategies will be most beneficial to your financial circumstances and long-term goals. Your CPA will be able to identify the end-of-year tax actions that are right for you and help you create a plan for lowering your tax obligations in 2023.

Contact Fisher, P.A. for Year-End Tax Planning Assistance

At Fisher, P.A., our team of experienced accounting professionals are ready to answer your questions, walk you through our tax compliance and financial planning solutions, and show you how to maximize your refund next spring by completing a tax plan for you.

For tax planning, we charge a fee of $395 for CPA time, and $195 for associate time which is billed at an hourly rate. Tax planning includes time for prepared calculations and a review call with a CPA to review the tax plan if you choose. The estimated invoiced time for a tax plan is 2-3 hours.   We cater to businesses of all sizes throughout the United States, aiming to alleviate the burden of accounting off your shoulders.

Our skilled team is ready to get to work so you can be prepared for the upcoming tax season. Call us at 704.332.7800 or fill out our contact form today to schedule a consultation or tax planning calculation.

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