As we enter the 4^th quarter of 2023, it's time to shift focus toward year-end financial planning. One of the most powerful ways to maximize your financial potential while minimizing your tax liability is to plan for this year’s taxes – this year! At Buttonwood Financial Group, we view part of our role to serve as your ‘Idea Team’ and provide insight through crucial planning steps. With the clock ticking, now is the perfect time to explore strategy and take action.

The Importance of Year-End Tax Planning

Year-end tax planning is about much more than just filling out forms and sending a quarterly estimated tax payment to the IRS. It's an opportunity to strategically manage your cash flows and optimize your tax burden. By taking advantage of advanced tax strategies, you can keep more of your hard-earned money and channel it towards your financial goals.

Key Strategies to Consider

1. Tax-Loss Harvesting

One effective strategy is tax-loss harvesting. This involves selling investments that have incurred losses to offset capital gains in your portfolio. Not only does this reduce your tax liability, but it can also be a strategic move to rebalance your investment portfolio for the year ahead. For assets we manage, we regularly take advantage of tax-loss harvesting throughout the year. If you have assets you are managing personally and haven’t taken advantage of tax-loss harvesting, now is the time to do so.

2. Roth IRA Conversions

Converting assets in your traditional IRA to a Roth IRA can offer substantial long-term benefits, including tax-free withdrawals in retirement as well as tax-free withdraw implications for your beneficiaries. The tax implications of a Roth conversion can be complex. Consulting with a financial advisor at Buttonwood Financial Group can help you determine if this strategy aligns with your financial goals.

3. Charitable Giving

Year-end is an ideal time to make charitable donations. Not only will you be contributing to causes close to your heart, but you can also benefit from tax deductions. If you are over the age of 70 ½, exploring a Qualified Charitable Distribution (QCD) for gifts to charity (up to $100,000) can provide income tax reductions as well. Additional ‘stack on benefits’ for QCD’s can be found when combining State Tax credits often issued to non-profit organizations. (e.g.: MO NAP Credits). Buttonwood Financial Group can help you explore various charitable giving strategies that align with your values.

4. Retirement Account Contributions

Maximizing contributions to retirement accounts such as a 401(k) or IRA can help reduce your taxable income. It's crucial to understand the contribution limits, rules and deadlines of the various retirement plans available; and our Team of experts can guide you through these details.

5. Estate Planning / Gifting

For those with material assets, year-end is an opportune time to review and adjust your estate and gifting plan. Each year individuals can give away assets tax-free to both the giver and receiver. Once the new year starts, the prior year gifting window closes and can never be reopened. Effective estate planning can minimize estate taxes, ensuring your wealth is transferred seamlessly to your heirs.

Why Choose Buttonwood Financial Group

Navigating advanced tax strategies can be a daunting task that generally has better outcomes when coordinated with professionals. At Buttonwood Financial Group, our team of experienced Financial Advisors specializes in strategy for individuals and families who want to make the most of their financial success. Here are just a few reasons our current clients work with our Team:

Expertise

Our advisors and CPA network are well-versed in the latest tax laws and financial regulations. We stay up-to-date with the ever-changing financial landscape to provide you with the most current and effective strategies.

Customized Solutions

We understand that every individual's financial situation is unique. We tailor our ideas to your specific goals and circumstances, ensuring the strategies we implement align with your objectives.

Peace of Mind

With Buttonwood Financial Group at their side, our clients proactively approach year-end tax planning with confidence. Using software specifically designed to highlight tax planning opportunities, we review opportunities, generate ideas and work in conjunction with CPA’s to implement strategy. We handle the complex calculations and paperwork, allowing you to focus on what matters most to you.

Start Now!

There's still time to implement advanced tax strategies that can significantly impact your financial future, but the window is narrowing. Some of the most impactful ideas can take a month or more to implement. As such, if you would like to optimize your tax strategy for 2023, please contact Buttonwood Financial Group today and schedule a consultation with one of our expert Financial Advisors. Together, we will develop a personalized plan to optimize your year-end tax strategy and set you on the path to financial success.