Next Avenue: A bad year for stocks, bonds and inflation but a good one for lowering taxes: Tax planning moves to think about now

by | Dec 5, 2022 | Stock Market

This article is reprinted by permission from NextAvenue.org. It may be months before you need to file your 2022 taxes (the deadline is Tuesday, April 18, 2023), but this is exactly the right time to make smart moves to lower your 2022 taxes. If you wait beyond Dec. 31, it’ll generally be too late.

While this has been a pretty miserable year for the stock and bond markets and inflation, it’s a good one for year-end tax cutting. A report by Wolters Kluwer, the international publishing and professional services company, found that “the tax world has largely stabilized since the passage of the Tax Cuts and Jobs Act in 2017. This has made year-end planning more predictable.” As my Friends Talk Money podcast co-host Pam Krueger said in our recent episode on year-end tax tips, “year-end is just a natural time to pause and just assess and review everything, taxes included.” Here are suggestions to trim your 2022 tax bill (before making any of these moves, consult with your tax adviser):Figure out your tax brackets You’ll want to first estimate your tax bracket for 2022 and 2023 so you can see which year it’ll likely be higher and then make tax moves accordingly. For example, if you expect to be in a higher tax bracket in 2023, you may want to try pushing anticipated 2023 income into 2022 and postpone making some tax-deductible expenses until next year, when they’ll be more valuable to you. Conversely, if you think you’ll be in a lower tax bracket next year, you may want to do the reverse — push anticipated 2022 income into 2023 and pay tax-deductible expenses this year, when t …

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