INTRODUCTION
As the end of the year approaches, it's time for high-net-worth households to review their finances and plan for 2025. At Range, our team of financial advisors is here to help ensure you take advantage of every tax-saving opportunity before it's too late.
RETIREMENT ACCOUNT CONTRIBUTIONS
First and foremost, it's important to max out your pre-tax retirement contributions. The 2024 401(k) and 403(b) deferral limit is $23,000, plus an additional $7,500 catch-up contribution if you're age 50 or older. Be sure you're taking advantage of any employer match as well.
You'll also want to max out your Health Savings Account, or HSA, contributions. The 2024 limit is $4,150 for individuals and $8,300 for families, plus an extra $1,000 if you're 55 or older.
And don't forget your IRA - you can contribute up to $7,000, plus an additional $1,000 if you're 50+.
MANAGING DEDUCTIONS
Another important consideration is managing your deductions. If you're expecting unusually high or low income this year, it may make sense to accelerate or defer certain deductions, like charitable contributions or medical expenses.
And if you're itemizing, a Donor Advised Fund could be a great way to bunch your charitable giving and lower your tax burden.
PERSONAL GIFTS AND 529 PLANS
Don't forget about personal gifts either. You can give up to $18,000 per recipient, or $36,000 per couple, without having to file a gift tax return. And if you have a 529 college savings plan, you can "superfund" it by contributing up to $180,000 at once, avoiding the gift tax.
TAX-LOSS HARVESTING
Tax-loss harvesting is another powerful strategy to consider. By selling securities at a loss, you can offset other capital gains and even up to $3,000 of ordinary income. If you have large capital gains incurred during the year, consider taking action on positions currently held at a loss to offset these capital gains.
Just be mindful of the wash sale rule - the last day to "double up" on a position and avoid that is November 29th.
CLOSING
These are just a few of the many year-end tax planning opportunities to take advantage of.
If you'd like to learn more about how Range can help you maximize your wealth by reducing your tax burden, don't hesitate to reach out.
We're here to ensure you finish the year strong and set yourself up for success in 2025.
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