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Financial planning experts recommend reviewing your tax planning now—in October—before the end of the year. Delaying decisions nearer to the end of the year may make implementation more challenging.
Here are some strategies to consider:
- Take long-term capital gains on stocks and mutual fund shares that have significantly increased in value, particularly in the recent up-market.
- Find alternatives to lock in high fixed income rates at low risk, as interest rates begin to drop in response to actions by the Fed.
- Reduce income taxes assessed on Required Minimum Distributions (RMD) from IRAs and other qualified plans, which must be taken by year’s end.
Revisit and update estate plans now or early in 2025 since the time for taking advantage of the substantial estate and gift tax lifetime exemption may be drawing short, remaining in effect only through the end of 2025. Exempt amounts are scheduled to return to 2017 levels in 2026. Adjusted for inflation, the single taxpayer limit would drop back to an estimated $7 million, lowered from the present amount for 2024 of $13.61 million per individual.
Some options, including charitable gift annuities and charitable remainder trusts, involve partnering with charitable organizations like AFHU to help you reduce or eliminate income, capital gains, and estate taxes while maintaining lifetime income for yourself and others.
Particular attention should be given before year’s end to the Legacy IRA Act, which can help you reduce taxes on your RMD withdrawals while receiving high, fixed-rate lifetime income for yourself and, perhaps, your spouse. Please contact us at plannedgiving@afhu.org or at 212.607.8524 for more information. |
