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2023-2024 Tax Planning Guide for Individuals

In today's rapidly changing economic landscape, tax planning has become an indispensable tool for individuals and businesses alike. With the rise in interest rates, the threat of inflation, and the persistent market volatility, taxpayers are facing the challenge of managing their cash flow while minimizing their tax burdens. As we approach the end of the year, individuals, business owners, and family offices must take stock of their 2023 and 2024 tax situations and seize the opportunities to optimize their tax obligations.

For individuals, this means exploring deductions, credits, and exemptions that can help lower their taxable income. It may involve maximizing contributions to retirement accounts, taking advantage of education-related tax benefits, or strategically timing capital gains or losses. By analyzing their financial goals and working closely with a tax advisor, individuals can devise a personalized tax plan that minimizes their tax liability and maximizes their financial well-being.

The information contained within this article is based on federal laws and policies in effect as of the publication date. This article discusses tax planning for federal taxes. Applicable state and foreign taxes should also be considered. Taxpayers should consult with a trusted advisor when making tax and financial decisions regarding any of the items below.


Maximizing the Benefits of Long-Term Capital Gains

The long-term capital gains rates for 2023 and 2024 are shown below. The tax brackets refer to the taxpayer’s taxable income. Capital gains also may be subject to the 3.8% Net Investment Income Tax.

2023 Long-Term Capital Gains Rate Brackets

Long-Term Capital Gains Tax Rate

Joint/Surviving Spouse


Head of Household

Married Filing Separately

Estates & Trusts


$0 – $89,250

$0 – $44,625

$0 – $59,750

$0 – $44,625

$0 – $3,000


$89,251 – $553,850

$44,626 – $492,300

$59,751 – $523,050

$44,626 – $276,900

$3,001 – $14,650


Over $553,850

Over $492,300

Over $523,050

Over $276,900

Over $14,650


2024 Long-Term Capital Gains Rate Brackets

Long-Term Capital Gains Tax Rate

Joint/Surviving Spouse


Head of Household

Married Filing Separately

Estates & Trusts


$0 – $94,050

$0 – $47,025

$0 – $63,000

$0 – $47,025

$0 – $3,150


$94,051 – $583,750

$47,026 – $518,900

$63,001 – $551,350

$47,026 – $291,850

$3,151 – $15,450


Over $583,750

Over $518,900

Over $551,350

Over $291,850

Over $15,450


Long-term capital gains (and qualified dividends) are subject to a lower tax rate than other types of income. Investors should consider the following when planning for capital gains:

  • Holding capital assets for more than a year (more than three years for assets attributable to carried interests) so that the gain upon disposition qualifies for the lower long-term capital gains rate.
  • Considering long-term deferral strategies for capital gains such as reinvesting capital gains into designated qualified opportunity zones.
  • Investing in, and holding, “qualified small business stock” for at least five years.
  • Donating appreciated property to a qualified charity to avoid long-term capital gains tax (also see Charitable Contributions, below).


Long-Term Care Insurance and Services

Premiums an individual pays on a qualified long-term care insurance policy are deductible as a medical expense. The maximum deduction amount is determined by an individual’s age. The following table sets forth the deductible limits for 2023 and the estimated deductible limits for 2024 (the limitations are per person, not per return):



Deduction Limitation 2023

Deduction Limitation 2024

40 or under



Over 40 but not over 50



Over 50 but not over 60



Over 60 but not over 70



Over 70




Maximizing Retirement Plan Contributions

Individuals may want to maximize their annual contributions to qualified retirement plans and Individual Retirement Accounts (IRAs).

  • The maximum amount of elective contributions that an employee can make in 2023 to a 401(k) or 403(b) plan is $22,500 ($30,000 if age 50 or over and the plan allows “catch up” contributions). For 2024, these limits are $23,000 and $30,500, respectively.
  • The SECURE Act permits a penalty-free withdrawal of up to $5,000 from traditional IRAs and qualified retirement plans for qualifying expenses related to the birth or adoption of a child after December 31, 2019. The $5,000 distribution limit is per individual, so a married couple could each receive $5,000.
  • Under the SECURE Act, individuals are now able to contribute to their traditional IRAs in or after the year in which they turn 70½.
  • Beginning in 2023, the SECURE Act 2.0 raised the age that a taxpayer must begin taking required minimum distributions (RMDs) to age 73. If the individual reaches age 72 in 2023, the required beginning date for the first RMD is April 1, 2025, for 2024. If the taxpayer reaches age 73 in 2023, the taxpayer was 72 in 2022 and is subject to the age 72 RMD rule in effect for 2022. If the taxpayer reached age 72 in 2022, the first RMD was due April 1, 2023, and the second RMD is due December 31, 2023.
  • Individuals age 70½ or older can donate up to $100,000 to a qualified charity directly from a taxable IRA.
  • The SECURE Act generally requires that designated beneficiaries of persons who died after December 31, 2019, take inherited plan benefits over a 10-year period. Eligible designated beneficiaries (i.e., surviving spouses, minor children of the plan participant, disabled and chronically ill beneficiaries, and beneficiaries who are less than 10 years younger than the plan participant) are not limited to the 10-year payout rule. Special rules apply to certain trusts.
  • Under proposed Treasury Regulations (issued February 2022) that address required minimum distributions from inherited retirement plans of persons who died after December 31, 2019, and after their required beginning date, designated and non-designated beneficiaries will be required to take annual distributions, whether subject to ten years or otherwise.
  • Small businesses can contribute the lesser of (i) 25% of employees’ salaries or (ii) an annual maximum set by the IRS each year to a Simplified Employee Pension (SEP) plan by the extended due date of the employer’s federal income tax return for the year that the contribution is made. The maximum SEP contribution for 2023 is $66,000. The maximum SEP contribution for 2024 is $69,000. The calculation of the 25% limit for self-employed individuals is based on net self-employment income, which is calculated after the reduction in income from the SEP contribution (as well as for other things, such as self-employment taxes).

Foreign Earned Income Exclusion

The foreign earned income exclusion is $120,000 in 2023 and increases to $126,500 in 2024.


Alternative Minimum Tax

A taxpayer must pay either the regular income tax or the alternative minimum tax (AMT), whichever is higher. The established AMT exemption amounts for 2023 are $81,300 for unmarried individuals and individuals claiming head-of-household status, $126,500 for married individuals filing jointly and surviving spouses, $63,250 for married individuals filing separately, and $28,400 for estates and trusts. The AMT exemption amounts for 2024 are $85,700 for unmarried individuals and individuals claiming head-of-household status, $133,300 for married individuals filing jointly and surviving spouses, $66,650 for married individuals filing separately and $29,900 for estates and trusts.

Limitation on Deductions of State and Local Taxes (SALT Limitation)

For individual taxpayers who itemize their deductions, the Tax Cuts and Jobs Act introduced a $10,000 limit on deductions of state and local taxes paid during the year ($5,000 for married individuals filing separately). The limitation applies to taxable years beginning on or after December 31, 2017, and before January 1, 2026. Various states have enacted new rules that allow owners of pass-through entities to avoid the SALT deduction limitation in certain cases.


NOLs and Business Loss Limitations

Net operating losses (NOLs) generated in 2023 are limited to 80% of taxable income and are not permitted to be carried back. Any unused NOLs are carried forward subject to the 80% of taxable income limitation in carryforward years.

A non-corporate taxpayer may deduct net business losses of up to $289,000 ($578,000 for joint filers) in 2023. The limitation is $305,000 ($610,000 for joint filers) for 2024. A disallowed excess business loss (EBL) is treated as an NOL carryforward in the subsequent year, subject to the NOL rules. With the passage of the Inflation Reduction Act, the EBL limitation has been extended through the end of 2028.


We can assist you with tax implications

In conclusion, tax planning is a crucial aspect of managing your finances in today's ever-changing economic landscape. By taking advantage of deductions, credits, and exemptions, individuals and businesses can lower their taxable income and optimize their tax obligations. Maximizing the benefits of long-term capital gains, exploring long-term care insurance and services, and maximizing retirement plan contributions are just a few strategies to consider. It's important to consult with a trusted advisor to make informed tax and financial decisions. As we approach the end of the year, now is the time to review your 2023 and 2024 tax situations and seize the opportunities to minimize your tax liability and maximize your financial well-being.

Stay informed and engaged to make the most of your tax planning efforts.

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