Taxpayers have plenty to be concerned about in 2024...
Economic uncertainty.
Inflation and interest rates.
A contentious 2024 presidential election that could inject even more uncertainty and market drama.
On top of all that, many of the provisions in the 2017 Tax Cuts and Jobs Act are scheduled to expire next year unless lawmakers extend them.1
The current tax rates might be the lowest you'll see for the rest of your life, and I want to help you to make the most of them.
It's more important than ever to make sure you're taking advantage of every tax edge you possibly can this year.
Acting now could be important because you might not have the ability to seize these opportunities in future tax years.
I want to emphasize that this is a limited opportunity to leverage current laws. The 2017 rules are scheduled to expire in 2025 (if they don't disappear sooner under a new administration in 2025), and most taxpayers could see a tax hike.1
Fortunately, there are investment strategies you could capture right now to help make sure you don't pay more than your fair share in taxes. But you should act quickly, because they could soon disappear completely.
This tax-savvy guide is designed for high earners just like you who are concerned about whether their retirement portfolios might start sinking in an uncertain future that could include higher taxes.
One of the tax-savviest moves you can make in 2024 is to optimize your contributions—especially before April 15, 2025, because it's your last opportunity to make some last-minute retroactive contributions for 2023 that could help lower the taxes you pay.
And the savvy tax moves can go way beyond your retirement plan.
Have you checked for embedded capital gains in your investments? If so, you may want to consider taking action now, before any potential tax changes are made.
Harvesting them now under a favorable tax regime where the top rate is 20% could be beneficial if capital gains lose their favorable tax treatment in the near future.
Taxes are just one part of your overall investment picture, but it could offer an opportunity to make tactical investment changes where prudent.
Have you optimized your opportunities to create tax-free income? Currently, savvy investors who have the ability to use a mega-backdoor Roth are doing so by adding after-tax contributions to their 401(k)s and then converting to Roth IRAs.
This strategy could be eliminated forever under future administrations, so if a mega-backdoor Roth strategy sounds interesting, consider it before it's too late.
With your 2024 tax and investment documents in hand, we can look for favorable Roth conversion opportunities under the current rules.
Not all 401(k) plans allow for this strategy. However, if you have pretax money that you put in any type of retirement account, you may still want to convert some of it to a Roth (in moderation). The entire amount of the conversion is taxable income to you, but it may still make sense in view of your overall tax strategy.
Under current tax laws, it's harder to use itemized deductions to save on your taxes. The standard deduction for taxpayers who are married filing jointly is $29,200 and $14,600 for single filers in 2025.[^3] That puts the bar a little higher each year, but savvy taxpayers know how to combine deductions to make it past the standard deduction threshold.
2025 and 2026 may be important years for this technique as we don't know what will happen to deductions if current laws expire.
How can you use this opportunity in 2025? Now's the perfect time to take a look at last year's expenses and plan ahead for the following opportunities:
Depending on what happens when current tax laws expire, it's possible that you're experiencing the lowest tax bracket of your life.
If that's the case, then it makes sense to optimize the amount of income you have this year without pushing your income into the next higher tax bracket.
Yes, it could mean paying more in tax this year than you would otherwise. And that's not fun. But paying tax on the highest income in your current tax bracket could mean creating less of a tax exposure compared to when your tax bracket (and marginal tax rate) are higher.
With your 2024 documents in hand, it's important to carefully coordinate a strategy with your CPA and financial professional to avoid unforeseen complications.
You're a high earner who's worked hard and deserves to pay no more than your fair share. And right now, with all the market and political uncertainties, it's very hard to know what the future may hold.
There are currently opportunities for tax savings—but they could disappear at any time. Many are expected to expire in 2025, making tax strategies especially important this year.
Some of these maneuvers are a little more complex and require the help of knowledgeable professionals to help make sure that you don't end up on the wrong side of your current tax bracket—or the IRS, for that matter.
In addition to developing the strategy, you also need to execute it at the right time. We don't know exactly when these opportunities will expire; and when they do, some of them may disappear forever.
You've already started to build a significant fund for your retirement years, and by consulting with competent professionals, you could keep more of it rather than handing it over to the IRS.
You've taken the first step by reading through this guide to find out what opportunities you could be missing out on. Take the next step by contacting us for your complimentary 1:1 Tax Opportunities Session today.
You're a high earner who's worked hard and deserves to pay no more than your fair share. And right now, with all the market and political uncertainties, it's very hard to know what the future may hold.
There are currently opportunities for tax savings—but they could disappear at any time. Many are expected to expire in 2025, making tax strategies especially important this year.
Some of these maneuvers are a little more complex and require the help of knowledgeable professionals to help make sure that you don't end up on the wrong side of your current tax bracket—or the IRS, for that matter.
In addition to developing the strategy, you also need to execute it at the right time. We don't know exactly when these opportunities will expire; and when they do, some of them may disappear forever.
You've already started to build a significant fund for your retirement years, and by consulting with competent professionals, you could keep more of it rather than handing it over to the IRS.
You've taken the first step by reading through this guide to find out what opportunities you could be missing out on. Take the next step by contacting us for your complimentary 1:1 Tax Opportunities Session today.