End-of-the-Year Tax Strategies

Tax Optimizations, Roth Conversion, Long-term capital gains, Tax Loss Harvesting, Tax Gains Harvesting, 401k, IRA, Roth, UTMA, Crypto

One month left until the end of the year… Don't forget about tax optimizations! Here's what you can still do in this year:

1. Roth Conversion

If you expect your income (and taxes) to increase, performing a Roth Conversion before the end of this year might be a good idea. Roth Conversion is a taxable event since we move money from a tax-deferred account to a tax-free one. With Roth Conversion, you pay (presumably low) taxes now and then and enjoy future tax-free growth and qualified withdrawals.

This strategy works well if you have no taxable income or your income is lower than tax deductions. Roth Conversion creates reportable income so that we may benefit from full tax deductions.

Roth Conversion may be applied to IRA or employer-sponsored plans, like 401k, 401a, 403b, and 457b. But not all plans are created equal. Call your plan administrator and find out if Roth Conversion is allowed.

2. Solo 401k

Do you operate a family business with no additional W-2 employees except perhaps spouses and partners…