Your 2023 Guide to Year-End Tax Planning - Rodgers & Associates

Your 2023 Guide to Year-End Tax Planning

As the end of year approaches, our client conver­sa­tions turn to how we can strate­gi­cally minimize taxes. We call this tax planning, and together we look at the ways they give, save, and invest. We also consider how tax laws might be changing from one year to the next.

The Consol­i­dated Appro­pri­a­tions Act of 2023 is one example for this year. While the bill contains a variety of retirement provi­sions, some of the most important changes take effect in 2023. (Find the details in this article.) It is also important to remember that some tax oppor­tu­nities in 2023 may go away by December 31, 2025, when the 2017 Tax Cuts and Jobs Act (TCJA) expires. So be sure to take advantage of those tax breaks while they are still available.

Here, we will look at deduc­tions and oppor­tu­nities to consider as you prepare to close out your tax year.

Retirement Savings

If you are under age 50 and looking to make headway on retirement savings, the retirement contri­bu­tions deduction could be a valuable option. This elective deferral (contri­bution) is for employees under 50 who partic­ipate in 401(k), 403(b), and most 457 plans, as well as the federal Thrift Savings Plan. The annual limit is $22,500 per individual.

If you are age 50 and over, the catch-up contri­bution for employees partic­i­pating in the same types of plans is still available. That limit increased this year to $7,500 per individual (or $30,000 in contri­bu­tions for the full year). For both options, all contri­bu­tions must be made in 2023.

Do you want to max out your IRA contri­bu­tions? The limit for individuals increased to $6,500 for 2023. The catch-up contri­bution limit for folks age 50 and over, which is not subject to an annual cost-of-living adjustment, remains $1,000 (or $7,500 in total for the year). IRA contri­bu­tions for 2023 can be made up to the April 15, 2024, filing deadline.

Charitable Contributions

The TCJA roughly doubled the standard deduction amounts. If income tax deduc­tions are important to you when making chari­table gifts, keep in mind your total itemized deduc­tions must exceed the standard deduction amount to realize the benefit. For 2023 tax returns, the standard deduction for individuals is $13,850, and the standard deduction for married couples filing jointly and surviving spouses is $27,700. If you itemize deduc­tions, you may want to bunch two to three years’ worth of chari­table gifts into 2023. (Contri­bu­tions to a donor-advised fund are a great way to use this technique.)

Another change to note is that the Consol­i­dated Appro­pri­a­tions Act shifted the age for required minimum withdrawals from retirement accounts from age 72 to 73. The law does still allow taxpayers age 70 ½ and older to make a Qualified Chari­table Distri­b­ution (QCD) in the form of a direct transfer (up to $100,000). The payment goes directly from their IRA to a charity, including all or part of the required minimum distri­b­ution (RMD).

This is an excellent way for seniors to take RMDs while reducing their taxable IRA distri­b­ution amount. If you pursue this option, it is critical to send the funds directly from your retirement account to the charity. The contri­bution will be disqual­ified if the money stops in your checking (or other) account along the way. The funds must come out of your IRA by December 31, 2023.

Bundling Deductions

Deduc­tions are crucial to reducing tax exposure, and it is essential to under­stand which ones work for you. Tax deduc­tions such as state and local taxes, mortgage interest, and chari­table deduc­tions were seriously cut back through the TCJA. This means you may need to bundle up if you want to itemize.

Depending on your financial situation and portfolio, it might make sense to accel­erate your mortgage payments. You could consider paying off more of your mortgage and work toward retiring that debt now that the tax deduction for mortgage interest is capped.

Separately, if your 2024 property taxes are billed or levied before the end of 2023, you can prepay them and claim them as a deduction. Note: This is only possible, however, if your local government formally bills your 2024 taxes by December 31, 2023.

Unreim­bursed medical expenses are also deductible if they meet the 7.5% Adjusted Gross Income (AGI) floor. This means accel­er­ating any medical proce­dures and payments your health insurance does not cover could be helpful. This deduction may also include long-term care premiums and some home modifi­ca­tions if you are planning to age in place.

Capital Gains and Losses

You can pursue several different tax-saving oppor­tu­nities within your investment portfolio. Start by reviewing the various sales you have realized on stocks, bonds, and other invest­ments this year. Then check your remaining invest­ments and determine whether they have an unrealized gain or loss. (“Unrealized” means you still own the investment, versus “realized,” which means you have sold the asset.) 

You may qualify for a 0% capital gains tax rate for some or all the long-term capital gains you realize in 2023 (see the following chart). If this is the case, then you will want to determine the highest gains you can realize while still taking advantage of the tax break.

2023 Income Tax Rates on Long-Term Capital Gains

Capital Gains
Tax Rate
Taxable Income
Taxable Income
(Married Filing Separately)
Taxable Income
(Head of Household)
Taxable Income
(Married Filing Jointly)
0%up to $44,625up to $44,625up to $59,750up to $89,250
15%$44,625 to
$44,625 to
$59,750 to
$89,250 to

Still in place for 2023 is the 3.8% surtax on net investment income. This kicks in for single people with modified AGI over $200,000 and joint filers with modified AGI over $250,000. If this applies to you, one strategy is to determine if you have unrealized losses that can be harvested to reduce the amount of surtax.

Loss harvesting means selling certain invest­ments that will generate a loss. You can use an unlimited amount of capital losses to offset capital gains. However, you are limited to only $3,000 of net capital losses that can offset other income, such as wages, interest, and dividends. Any remaining unused capital losses can be carried into future years indefinitely.


When you have a complex financial life, decreasing your tax liability requires a strategic tax plan. There are many moving parts. Making one decision could have unintended conse­quences that defeat your tax-saving strategy.

As financial advisers, we are proactive when it makes sense. Proper tax planning requires an awareness of what is new and changed from last year. Looking at your entire financial picture helps us design a plan to excavate all the “hidden” oppor­tu­nities available to you specifically.


  • Contri­bu­tions to an employer-sponsored plan must be made by December 31, 2023, to qualify for the 2023 tax year.
  • The 2017 Tax Cuts and Jobs Act roughly doubled the standard deduction for most taxpayers.
  • An additional 3.8% surtax is levied against investment income for high-income taxpayers.