Now that working from home has become more common, are you considering a move to another state? Perhaps to a low-tax or no-tax state? If so, you are not alone, and here are some of the things you should be considering for income tax purposes.
- Insurance Review: Year-end is a great time to review all your insurance. Changed circumstances and policy modifications can greatly impact your cost and coverage. Don’t overpay or be caught by surprise, particularly if you are a trustee.
- Health Insurance: Health insurance is one of the largest expenses for individuals and companies. And it keeps rising every year. Alternative platforms and other options may exist to reduce costs without any loss in benefits to start the new year. For employer-based plans, tax deductibility also can be maximized through payroll but is often overlooked.
- Pension Plans: A pension plan can be used to increase deductions for closely-held business owners up to $400,000. It is best suited to smaller companies with consistent cash flow. The plan must be implemented by the return due date, but benefits can be enhanced by implementing before year-end.
- Reduce Taxable Investment Income: Structures exist to reduce or eliminate the income tax on future investment income. They work particularly well for trusts and individuals with substantial ordinary investment income or those contemplating the sale of a closely-held business or other major asset.
2023 Year-End Tax Planning Resources
Disclaimer:No action should be taken without advice from a member of Withum’s Tax Services Team because tax law changes frequently, which can have a significant impact on this guide and your specific planning possibilities.