Last-Minute Tax Tips for 2022

Last-Minute Tax Tips for 2022

Last-Minute Tax Advice
The year is winding down. It’s time to cross these financial planning items off your list before the calendar flips

  1. Maximize contributions to retirement savings accounts.

    Depending on your employer’s plan, you may be able to contribute up to $20,500 in tax-deferred earnings to your 401(k) or 403(b) in 2022. If you turn 50 before Dec. 31, and your plan allows it, you can contribute an additional $6,500. For individual retirement accounts (IRAs), the maximum contribution in 2022 is $6,000, plus a $1,000 “catch-up contribution” for anyone who turns 50 before year-end. You need to make 401(k) contributions by the end of the calendar year, but IRAs and some other tax-deferred retirement accounts allow you to contribute until April 18, 2023.

  2. Consider a Roth IRA conversion.

    A bear market in stocks makes Roth conversions more appealing because you pay tax on less money…and watch it grow tax-free after that. The deadline to convert is Dec. 31, and the conversion of after-tax amounts is not included in your gross income.

  3. Recognize investment gains or losses.

    You need to sell securities by Dec. 30, the last trading day of 2022, to realize a capital gain or loss for the year. Selling a position at a price below your purchase price means those losses can be used to offset other gains and income in your portfolio—lowering your annual tax bill.

  4. Check the expiration.

    Don’t let stock options expire. But remember, exercising nonqualified options results in ordinary income, so keep an eye on how the move will affect your tax bracket. Meanwhile, exercising incentive stock options could result in an alternative minimum tax liability. Options can be complex, so it’s important to consult a tax specialist before making a move.

  5. Get organized.

    My final tip is a simple one: Gather the statements, receipts and other paperwork you’ll need to complete your 2022 tax return today. This will make life much easier when it comes time to file in 2023, and hopefully it’ll mean you get a refund sooner.

Use this as your checklist and reach out to your Adviser team for assistance.

Tax and legal information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice.  Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice. Always consult a licensed attorney or tax professional regarding your specific legal or tax situation.

Our statements and opinions are subject to change without notice.  All investments carry risk of loss and there is no guarantee that investment objectives will be achieved.

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