Episode #477

With 2024 right around the corner, it’s time for a final year-end tax planning push! There are all kinds of ways to pay less to the IRS, and today’s guest is here to help you save as much money as possible!

Welcome back to the “BiggerPockets Money” podcast! Today, we’re joined by certified public accountant and financial planner Sean Mullaney. In this episode, Sean delivers a thorough breakdown of everything you should be doing to lower your tax burden for not only 2023 but also over your entire lifetime. While there are many moves you can make before this year’s filing deadline, you don’t have to make them all at once. Sean shares how most tax moves fall into one of three “buckets”—moves that should be handled urgently, by year-end, or in early 2024.

Whether you’re rushing to tie up loose ends in 2023 or looking to maximize retirement savings, Sean offers a variety of helpful tax tips for those in different phases of life. You’ll learn how to reap the tax benefits of donor-advised funds, how to time a Roth conversion, and how to avoid giving the IRS a large interest-free loan!

Show Notes at:

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DISCLAIMER: “The discussion is intended to be for general educational purposes and is not tax, legal, or investment advice for any individual. Scott, Mindy, BiggerPockets, and the BiggerPockets Money podcast do not endorse Sean Mullaney, Mullaney Financial & Tax, Inc. and their services.”

00:00 Intro

01:06 Lifetime Tax Opportunities

08:23 Donor-Advised Funds 101

13:29 Roth Conversion Strategy

17:58 MORE “Urgent” Tax Moves

22:07 Year-End Tax Moves

27:41 What to Do by April 15

30:21 Tax Planning in 2024

32:22 Essential Tax Tips

38:20 Connect with Sean!

38:50 SLASH Your Lifetime Tax Burden!…(read more)

LEARN MORE ABOUT: IRA Accounts

CONVERT IRA TO GOLD: Gold IRA Account

CONVERT IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

Year-End Tax Planning: What to Know NOW to Pay Less Taxes in 2024

As the year draws to a close, it’s a good time to start thinking about year-end tax planning. By taking certain steps before the end of the year, you can potentially reduce your tax bill for 2024. With the right strategies, you can pay less in taxes and keep more of your hard-earned money in your pocket. Here are some key things to consider for year-end tax planning:

Review Your Income and Deductions
The first step in year-end tax planning is to review your income and deductions for the year. Look at your overall income, including any bonuses, investment income, and business income. Then, consider your deductions, including charitable contributions, mortgage interest, and other itemized deductions. By understanding your income and deductions, you can make strategic decisions to minimize your tax liability.

Maximize Retirement Contributions
Contribute as much as you can to your retirement accounts before the end of the year. This includes 401(k) plans, IRAs, and other retirement savings accounts. By maximizing your contributions, you can reduce your taxable income and potentially lower your tax bill for 2024. Additionally, contributing to retirement accounts can help you build long-term financial security.

Take Advantage of Tax Credits and Deductions
Be sure to take full advantage of any available tax credits and deductions. This may include education tax credits, child tax credits, and other credits that can reduce your tax liability dollar for dollar. Additionally, consider any deductions that you may be eligible for, such as the deduction for student loan interest or the deduction for self-employed individuals.

Consider Tax-Loss Harvesting
If you have investments that have decreased in value, consider selling them before the end of the year to realize a capital loss. You can use these capital losses to offset capital gains and potentially reduce your tax liability. Keep in mind that there are specific rules and limitations when it comes to tax-loss harvesting, so it’s important to consult with a financial advisor or tax professional before making any decisions.

Plan for Estimated Tax Payments
If you are self-employed or receive income that is not subject to withholding, such as investment income, you may need to make estimated tax payments. Review your income and expenses for the year and make sure you are on track with your estimated tax payments. By planning ahead and making timely payments, you can avoid underpayment penalties and stay in good standing with the IRS.

Consult with a Tax Professional
Year-end tax planning can be complex, especially if you have a high income or significant investments. It’s a good idea to consult with a tax professional to develop a personalized tax strategy that takes advantage of all available opportunities to reduce your tax bill. A tax professional can help you navigate the complex tax code and make informed decisions to minimize your tax liability.

In conclusion, year-end tax planning is an important aspect of managing your finances and minimizing your tax liability. By reviewing your income and deductions, maximizing retirement contributions, taking advantage of tax credits and deductions, considering tax-loss harvesting, planning for estimated tax payments, and consulting with a tax professional, you can set yourself up for a lower tax bill in 2024. Start planning now to make the most of the opportunities available to you and keep more of your money in your pocket.