Year-end Planning Opportunities

The holiday season is here and 2023 is approaching quickly. Now is the time to get a jump start on your year-end planning. Please review the following planning strategies and contact us with any questions.


  • You have until 12/31 to use your annual gift exclusion. The annual gift exclusion is $16,000 per donor for 2022 and will increase to $17,000 next year.  Intra-family gifting can be a good use of your annual exclusion.
  • The lifetime gift tax exclusion for 2022 is $12.06 million per taxpayer and will increase to $12.92 million next year. Presuming certain provisions of the Tax Cut and Jobs Act sunset in 2026, the lifetime gift tax exclusion would decline to near $7 million per taxpayer.

Tax-Efficient Gifting

  • Gifting appreciated assets, Qualified Charitable Distributions (QCDs), and Donor Advised Funds (DAFs) are helpful methods for gifting in a tax-efficient manner. If planning a QCD, please start the process now to ensure the qualified charity receives and confirms receipt of the assets by year-end.

Tax Bracket Management

  • When your tax deductions completely offset or exceed your taxable income, you have an excellent opportunity to pull forward taxable income to “use up” your excess deductions or to use up or “fill” the lower tax brackets. This allows you to distribute IRA assets, perform Roth conversions, or realize capital gains with minimal tax liability. In other words, don’t waste a low tax bracket!
  • Next year, the federal tax rates will remain the same, but the brackets will increase approximately 7%.  
  • In addition, the standard deductions for each tax filing status will increase approximately 7%.
    • The standard deductions for married couples filing jointly for tax year 2023 rises to $27,700 (up $1,800 from 2022). For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 (up $900 from 2022), and for heads of households, the standard deduction will be $20,800 for tax year 2023 (up $1,400 from 2022).

Retirement Account Contributions

  • 12/31 is the deadline for 401(k) salary deferrals and 401(k) catch-up contributions. Profit-sharing contributions are not due until your tax-filing deadline (including extensions).
  • Now is also a good time to review your salary deferral percentages. Employees making 401(k)/403(b) salary deferrals based on percentages (versus a flat dollar amount) run the risk of overfunding due to intra-year raises and/or bonuses. Many plan sponsors will not stop you from overfunding, so please review your current and projected deferrals.
  • Assuming your 2023 income will be static in relation to your 2022 income, your effective federal tax rate may decline due to a rise in the standard deduction and the inflation adjustments to the tax tables. As such, review your deferral allocation between Roth and non-Roth accounts considering your savings and tax-deferral goals.
  • The retirement contribution limits are scheduled to increase in 2023.

Required Retirement Account Distributions

  • Please review your investment statements and/or contact your adviser(s) to review your retirement account distribution requirements (required minimum distribution, or “RMD”). As a reminder, the IRS can impose a 50% penalty upon the amount of required distributions not withdrawn by the deadline.
  • Qualified Charitable Distributions may satisfy your distribution requirements.
  • Those who have recently inherited IRA assets are subject to specific distribution requirements.
  • If you are not aware of your distribution requirements, please contact us at your earliest convenience.

Employer Benefits

  • Be sure to review and utilize the benefits offered by your employer, including group life insurance, group long-term care insurance, medical/dental/vision, health savings accounts, flexible spending accounts, deferral compensation plans, retirement plans (salary deferrals and employer matching), etc.….