Tax Planning: Tips to Reduce Your Tax Liability

Happy Wednesday!

As the tax year draws to a close, it's time to strategize and optimize your tax planning to minimize your tax liability.
At our Wela, we're dedicated to helping our clients navigate this process seamlessly.

‍Utilize Tax-Advantaged Accounts
• Maximize Retirement Contributions: Contribute the maximum allowable amount to your 401(k) or IRA to
reduce taxable income.
• Catch-Up Contributions: Explore additional contributions if you're over 50 for added benefits.
• Roth Conversions: Strategically convert traditional IRA assets to Roth IRAs for potential long-term tax
advantages
• Health Savings Accounts (HSAs): Utilize HSAs to save for medical expenses tax-free, providing a triple tax
advantage.

‍Harvest Investment Losses
• Offset Gains: Sell investments with losses to offset capital gains, reducing overall tax liability.
• Maintain Diversification: Ensure tax-loss harvesting aligns with long-term investment goals and maintains
portfolio diversification.
• Carryover Losses: Carryover excess losses to future years for continued tax benefits.

Maximize Deductions
• Donate Appreciated Assets: Donate appreciated stocks or securities to charities to avoid capital gains tax.
• Qualified Charitable Distributions (QCDs): Utilize QCDs from your IRA if you're over 70½ to donate to
charities tax-free.
• Business Expenses: Ensure meticulous record-keeping to claim legitimate deductions.
• Medical Expenses: Leverage unreimbursed medical costs to enhance deductions.

‍Take Advantage of Tax Credits
• Child Tax Credit: Ensure eligibility and claim the child tax credit for qualifying dependents.
• Earned Income Tax Credit: Check eligibility for this credit, especially for lower-income earners.
• Education Credits: Explore opportunities for tax credits tied to education expenses.
• Energy Efficiency Credits: Upgrade your home for potential tax credits and energy savings.

‍Estate Planning Considerations
• Gifts and Inheritance: Leverage gift exclusions and plan inheritance distributions wisely.
• Trust Strategies: Explore trusts for potential tax benefits and efficient wealth transfer.
• Charitable Planning: Utilize charitable trusts and foundations for strategic giving.

Proactive year-end tax planning can significantly impact your tax liability and financial well-being. By implementing
these tips and working with our expert team, you can navigate the complexities of tax planning with confidence,
ensuring you keep more of your hard-earned money in your pocket.

We are here to help

‍_{Brent Forrest & Associates, LLC. dba Wela Financial Advisory (Wela) is a registered investment adviser. Information presented is for educational purposes only and should not be considered as specific investment advice. It does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein.}