Every year, you should look at your overall financial picture while you begin to gather your documents and materials for filing your taxes. Completing these two tasks earlier on in the year often amounts to better tax efficiency.
Working with your financial advisor, any other financial team members like your CPA, and your estate planning attorney ensures that you’ve considered all of the most important issues involved in financial planning and estate planning.
Retirement Account Reviews: How it Helps Estate Planning
The first task to accomplish is to fund your retirement account. In 2023, contribution limits for accounts like 403(b)s or 401(k)s are $22,500 or $30,000 at age 50 or above. For an IRA, the limits are $7,500 if age 50 or older and $6,500 for everyone else. The second important task to take care of early in the year is annual exclusion gifts. If you have the desire to make a gift to someone without triggering additional tax consequences, you can use your annual gift exclusions to do that.
In 2023, for example, you can gift up to $17,000 per person without triggering any gift tax consequences. That number increases to $34,000 for married couples. Bear in mind that you can make these gifts each year and can make these gifts up to $17,000 for each individual person you decide to gift to you.
Now is the Time: Hire an Estate Planning Attorney
Need more support with comprehensive estate planning? Now is a good time to talk over your 2023 estate planning goals. A lawyer can help you look at what you have in place already and how that can be augmented or shifted based on your needs.
