Meta Description: Looking for last-minute tax-saving tips? Learn how to lower your 2023 bill with these expert strategies. From harvesting losses to maximizing tax benefits, there are still opportunities to reduce your tax bill before the year ends.
**”Last-Minute Tax-Saving Tips to Lower Your 2023 Bill”**
It’s that time of year again when individuals are looking for ways to minimize their tax bill for the upcoming year. While the end of the year is fast approaching, there are still opportunities to reduce your tax bill for 2023. With the deadline of December 31 quickly approaching, it’s essential to consider some last-minute tax-saving opportunities. In this article, we’ll explore some expert tips on how to lower your tax bill for the forthcoming year.
**”Reduce profits by harvesting losses on bonds”**
A strategic approach to reducing your tax bill is to consider harvesting losses on bonds. This involves using investment losses to offset gains. By selling bond funds at a loss and purchasing individual bonds with high yields or other funds, you can improve your overall tax performance without changing the asset allocation. However, it’s crucial to be mindful of the wash sale rule, which blocks tax depreciation if you repurchase a “substantially identical” asset within a 30-day period before or after the sale.
**”Take advantage of tax benefit harvesting”**
Another approach to consider is tax benefit harvesting, which involves selling profitable assets in investment accounts while in the 0% long-term capital gains tax bracket. This is an often overlooked strategy that can be particularly beneficial for individuals with taxable income within the qualifying thresholds. By accurately estimating your revenue for the year, you can sell profitable assets and immediately buy them back to reset the basis, reducing future taxes.
**”Donate directly to a good cause”**
As the year draws to a close, making a charitable donation can be a beneficial way to claim deductions for the forthcoming year. While there may not be ample time to open and send money to a donor-advised fund, transferring assets from a bank account or investment account directly to a charity, provided your institution can initiate the transfer and the charity can accept the funds before December 31, can still be a viable option. Time is of the essence when it comes to making these donations, so it’s important to act swiftly.
In conclusion, while it may be late in the year to be highly strategic with tax planning, there are still valuable last-minute tax-saving measures that individuals can take advantage of to lower their 2023 tax bill. By exploring strategies such as harvesting losses on bonds, taking advantage of tax benefit harvesting, and making charitable donations, individuals can maximize their tax efficiency and potentially boost their refunds. With the deadline for many tax-saving opportunities quickly approaching, it’s essential to consider these expert tips and take action before the year ends.