3 Tax Planning Tips for You & Your Business in 2023
The drama of 2022 is finally reaching an endpoint, setting the stage for a prosperous 2023. The “new year” is synonymous with tax planning. Fret not, as Niswanger Law makes tax preparation and planning easy and economical.
Let’s take a quick look at a few tax planning tips for business owners and individuals in West Monroe, LA and throughout the U.S.
1. Minimize Deductions
Most people are aware that opportunities for minimizing deductions exist. Yet, plenty fail to fully capitalize on those money-saving avenues.
For starters, you can maximize tax deductions with the assistance of Niswanger Law. Our tax planning experts have helped business owners and people in West Monroe, LA and across the country reduce their tax burden through charitable gifts along with bunching.
Bunching is a strategy in which multiple years of contributions to charitable organizations are made in a single year. This is to make the most of deductions in a year in which taxes would otherwise be high.
Tax loss harvesting also serves as another valuable opportunity to unload portfolio holdings, albeit at a loss, in the quest to reduce taxable gains. Balance out your yearly investment winners with the sale of the losers to move toward equilibrium, and you’ll save a bundle come tax time.
2. Make the Most of Tax-Advantaged Accounts
Maximize your financial contributions to your tax-advantaged accounts, and you’ll successfully decrease your taxable income in the current year.
Examples of tax-advantaged accounts include:
- Traditional 401(k) accounts
- 403(b) accounts
- 529 college savings plans
- Health Savings Account (HAS)
Navigating the rules for contributions and withdrawals to such accounts has the potential to become confusing, especially in the context of the ongoing challenge of tax burden mitigation. Instead of attempting to overcome these challenges alone, lean on Niswanger Law’s tax planning specialists for ongoing guidance.
3. Recognize and Strategically React to Changes in Tax Law
Tax laws are dynamic. The tax laws of 2022 will likely be different than those of 2025 and so on. The federal government has made crucial changes that directly impact your tax planning in the current year and those that follow.
Whether you are a business owner or work for someone else, it is your financial interest to pay close attention to such changes and strategize tax planning accordingly.
For example, the amount of money an earner can contribute to a 401(k) retirement plan in ’23 has been elevated to $22,500. The change affects 403(b) plans and those of the 457 variety. Furthermore, we would be remiss not to mention the yearly catch-up contribution maximum for individuals age 50+ has been elevated from $1,000 to $7,500.
In the context of IRAs, the yearly contribution limits have been hiked to $6,500. The annual catch-up contribution limit for individuals 50+ is still $1,000. The figures apply to Roth IRA retirement accounts that are especially attractive to those in the prime of their careers.
Schedule Your Consultation With Niswanger Law
If uncertainties about taxes bug you, we’re here to help. Niswanger Law is here for business owners and individuals in West Monroe, LA and beyond. Lean on us for guidance with tax planning and more.