As the leaves begin to fall and the year gradually winds down, it’s not just the changing seasons that deserve your attention. The final quarter of the year beckons a financial review, inviting you to reassess your financial landscape and set the stage for a smooth tax season next April. Beyond the customary year-end financial housekeeping, a recent legislative development—the SECURE Act 2.0—introduces new dynamics into the tax planning arena. Let’s explore some of the key factors that may have an impact on your tax obligations for the coming year.

  1. Review Your RMDs (Required Minimum Distributions)

If you’re retired or approaching retirement age, it’s essential to understand the rules surrounding RMDs. The SECURE Act 2.0 has increased the age at which you must start taking RMDs from 70 ½ to 73, starting in 2023. If you turn 73 in 2024 or later, you can delay your RMDs even further, with a gradual increase to 75 by 2033. However, if you are required to take RMDs, ensure you follow the rules meticulously to avoid penalties.

  1. Maximize Retirement Plan Contributions

If you’re still working, consider using these last three months of 2023 to boost your retirement savings. Contributions to retirement plans like IRAs, 401(k)s, and 403(b)s grow and compound without taxation. In 2023, the maximum contribution limit for a 401(k) is $22,500, with an additional catch-up contribution of $7,500 available for those aged 50 and older. For IRAs, the maximum contribution is $6,500, with a $1,000 catch-up contribution for individuals in the same age group. Be aware that the deductibility of traditional IRA contributions may have income limitations.

  1. Defer Income to 2024

For the majority of taxpayers, it’s expected that regular income tax rates will remain stable in the near future. Consequently, it may be a prudent strategy to explore methods for delaying asset sales or deferring receipt of other income until next year. It’s important to note, however, that compensation and bonuses earned during this year will be subject to taxation in the same year they are received.

  1. Explore Tax-Loss Harvesting

As the year draws to a close, it’s an excellent time to evaluate your capital gains situation with your financial and tax advisors. If you anticipate significant gains for the year, consider tax-loss harvesting. This strategy allows you to recognize losses in one part of your portfolio to offset gains in another, reducing your overall tax liability when reporting capital gains.

  1. Consider Roth Conversions

Roth IRAs, 401(k)s, and 403(b)s don’t provide immediate tax deductions for contributions, but they offer tax-free growth and tax-free withdrawals during retirement. This makes them a compelling option, especially if you expect to be in a higher tax bracket when you retire. Converting traditional retirement accounts to Roth accounts involves paying taxes upfront but allows for tax-free withdrawals in retirement. Roth IRAs have the added benefit of no RMDs, and starting in 2024, Roth 401(k)s and 403(b)s will also be exempt from RMDs.

  1. Bundle Deductions and Explore Charitable Giving Options

The Tax Cuts and Jobs Act (TCJA) of 2017 raised the personal deduction significantly, making it more attractive for many taxpayers to take the standard deduction instead of itemizing. However, you may still benefit from itemizing if you bundle two or more years’ worth of charitable gifts into a single year. High-net-worth individuals may also consider donor-advised funds (DAFs) to donate appreciated assets to their chosen charities. DAFs provide tax benefits and allow donors to make gifts on their own timeline. Retired individuals should explore qualified charitable distributions (QCDs) from their IRA accounts. A QCD can satisfy your RMD requirement for the year and isn’t included in your taxable income.

Final Thoughts

Remember, the key to effective tax planning is early preparation and informed decision-making. Proactive tax planning at the end of 2023 can help you maximize your financial well-being and minimize your tax liability in the new year. Looking for a professional opinion? Contact us today to schedule a consultation with one of our experts.


This information is not intended to be relied upon as forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date noted and may change as subsequent conditions vary. The information and opinions are derived from proprietary and nonproprietary sources deemed by 83rd St. Wealth Management, LLC to be reliable. Please consult with 83rd St. Wealth Management, LLC financial advisor to ensure that any contemplated transaction in any securities or investment strategy, if mentioned, align with your overall investment goals, objectives, and tolerance for risk. Additional information about 83rd St. Wealth Management, LLC is available in its current disclosure documents, Form ADV and Form ADV Part 2A Brochure, which are accessible online via the SEC’s investment Adviser Public Disclosure (IAPD) database at, using CRD # 172115. 83rd St. Wealth Management, LLC is neither an attorney nor an accountant, and no portion of this content should be interpreted as legal, accounting or tax advice.