Expert Reveals Key Year-End Tax Planning Strategies to Optimize Your Lifetime Tax Bill: In this episode of Ask The Hammer, Jeffrey Levine, a tax expert with Buckingham, discusses effective year-end tax planning strategies to help reduce taxable income. He emphasizes that the goal should be to minimize lifetime tax bills rather than just focusing on the current year. Levine introduces the concept of “push and pull” in tax planning, which involves deciding whether to recognize income or take deductions in the current year or defer them to future years.
Key points include:
1. Consider future tax rates when making decisions about income recognition and deductions.
2. Roth conversions and retirement account contributions are examples of strategies to manage taxable income.
3. Tax loss harvesting can be beneficial but may not always be the best option, especially for those in the 0% long-term capital gains bracket.
4. Pay attention to significant jumps between tax brackets when planning.
5. Use newly released IRS tax brackets for 2025 to inform planning decisions.
Levine stresses the importance of starting year-end tax planning early, typically after October 15th, to allow sufficient time for implementation and to avoid last-minute rushes.
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