satoshipacioli on Nostr: November & December are prime months for tax planning. Here are 15 ways to save now ...
November & December are prime months for tax planning. Here are 15 ways to save now and in the future:
1️⃣ Max out retirement contributions – Contribute the max $23,000 to traditional or Roth 401(k)s. Traditional reduces taxable income; Roth builds tax-free retirement savings.
2️⃣ Mega Backdoor Roth – Some workplace plans allow after-tax 401(k) contributions that can be rolled into a Roth IRA or Roth 401(k). Save even more for retirement with tax-free growth potential.
3️⃣ Backdoor Roth – For high earners, contribute to a non-deductible traditional IRA and convert it to a Roth IRA. Ensure you have no pre-tax IRA balances by Dec 31 to avoid pro-rata taxes.
4️⃣ Donate appreciated shares – If donating to charity, give appreciated shares instead of cash to avoid capital gains taxes. Repurchase the shares to reset your cost basis and reduce future taxable gains.
5️⃣ Qualified Charitable Distribution (QCD) – If you’re 70½+, donate directly from your IRA (up to $105,000). This satisfies RMDs, avoids taxes on the distribution, and lets you take the standard deduction.
1️⃣ Max out retirement contributions – Contribute the max $23,000 to traditional or Roth 401(k)s. Traditional reduces taxable income; Roth builds tax-free retirement savings.
2️⃣ Mega Backdoor Roth – Some workplace plans allow after-tax 401(k) contributions that can be rolled into a Roth IRA or Roth 401(k). Save even more for retirement with tax-free growth potential.
3️⃣ Backdoor Roth – For high earners, contribute to a non-deductible traditional IRA and convert it to a Roth IRA. Ensure you have no pre-tax IRA balances by Dec 31 to avoid pro-rata taxes.
4️⃣ Donate appreciated shares – If donating to charity, give appreciated shares instead of cash to avoid capital gains taxes. Repurchase the shares to reset your cost basis and reduce future taxable gains.
5️⃣ Qualified Charitable Distribution (QCD) – If you’re 70½+, donate directly from your IRA (up to $105,000). This satisfies RMDs, avoids taxes on the distribution, and lets you take the standard deduction.