COLUMN: Your go-to 2024 tax moves

It’s never too early to start thinking about tax planning strategies for 2024. Here are some ideas to help you get started.

• Forecast your taxable income. Consider conducting a taxable income forecast and update it once a quarter. Use this information for your 2024 estimated tax payment obligations. You can also use your forecast to budget how much you’ll need to save each month so you won’t have a huge tax balance to scramble to pay at the end of the year. Your starting point for this forecast can be last year’s income, but with investments or potential business income, this exercise becomes more important.

• Prioritize retirement and savings plans. Take time to review your 401(k), individual retirement account (IRA), health savings account (HSA) and other savings accounts to ensure you’re maximizing your tax savings. Establish a regular contribution schedule early in the year, while taking into account new maximum contribution limits. And if you’re working, take full advantage of your employer’s retirement contribution matching program.

• Turn losses into tax savings. Selling assets such as stocks, bonds, limited partnership interests, and collectibles for less than you paid for them can result in a capital loss. The loss can be applied to offset capital gains and then used to reduce ordinary income, up to an annual limit of $3,000 ($1,500 if you’re married and file separately). Any remaining balance can generally be carried forward to future years. Keep in mind that capital losses caused by the sale of investments within your retirement accounts are not deductible.

• Conduct an investment strategy review. If you have not already done so, now is the time to conduct a review of your investment portfolio. This will help you create a tax-efficient strategy that allows you to allocate assets to accounts where tax savings can be maximized. For example, you may want to re-balance your investments to align to your retirement plan risk goals.

• Keep great records. You know you drove the miles, donated the items to charity, had the medical expense, and paid the daycare. How can the IRS be disallowing your valid deductions? Remember that without correct documentation the IRS is quick to disallow them. So set up good record keeping habits. Create both a digital and paper folder system separated by income and expense type. Keep a contemporaneous mileage log and properly document your charitable contributions.

One of my primary objectives is to help you achieve your financial goals through a holistic approach that is tax-efficient in my wealth management and tax resolution practice. For more information, visit www.fredtfoxiii.com.

Fred T. Fox III is a Lawton native who owns his own business.