This is Part Two of our list of suggested year-end strategies. Part 1 discusses gaming the federal standard deduction, and managing capital gains and losses. The tax environment is getting friendlier for workers. With year-end rapidly approaching, it’s time to consider moves that will lower your 2022 tax bill and hopefully position you for tax savings in future years too.
While the fates of the economy and the stock market remain uncertain, it now appears that there won’t be any significant tax increases this year or next year. Assuming that turns out to be true, the year-end tax planning environment is much better than it was at this time last year.
“While the fates of the economy and the stock market remain uncertain, it now appears that there won’t be any significant tax increases this year or next year.”
In fact, 40-year high inflation pushed the Internal Revenue Agency to this week release new tax rates and deductions for next year. The standard deduction for individuals and married people filing separately will be $13,850 for 2023. That’s up $900 from the $12,950 standard deduction for the upcoming tax season. For married couples filing jointly, the payout climbs to $27,700 for 2023. That’s a $1,800 increase from the $25,900 standard deduction set for the upcoming tax year. Read more on that here. With all that in mind, here are some tax-saving ideas to consider.Revamp your portfolio If you’re charitably inclined: sell loser stocks and give away the resulting cash; give away winner shares If you want to make gifts to charities or loved ones. You can do this in conjunction with an overall revamping of your taxable account stock and equity mutual fund portfolios. Make gifts according to the following tax-smart principles.Gifts to charities Don’t give away loser shares (currently worth less than what you paid for them). Instead, sell the shares and book the resultin …