Saving Money on Taxes

As 2023 comes to an end, people are asking about tax saving strategies.

Here are a few to consider:

1) 529 College savings plans: money can be withdrawn tax-free if used for college expenses. Also, many states allow you to deduct the amount invested from your state income tax this year.

2) Roth IRA conversions: If you are in a low tax year, you may want to convert your Traditional IRA into a Roth IRA. You will pay tax on it today, but it won’t be taxed again.

3) Reducing capital gains taxes: Mutual funds create lots of taxes by constantly buying & selling. Rotating out of active mutual funds and into passive ETFs can lower your capital gains taxes.

4) Tax-loss harvesting: Sell positions that do not align with your strategy at a loss. After you have zeroed out capital gains, you can deduct another $3,000/yr off ordinary income.

If you would like to discuss ways to reduce your taxes, click here to book a meeting.