Ways To Accelerate Income Post-December 31? (2023 Update)

I am retired and age 64 and try to manage my taxable income to optimize my multi-year taxes. I have appreciated securities to sell and IRA's to convert to Roth, and with all the moving parts of Obamacare subsidies (which apply to me this year and next), taxability of social security, etc. I am looking to hit the sweet spot each year.

I discovered that I had significantly less taxable income in 2021 than I would have liked. If I could roll back the clock, I would generate another $10-20K of income in 2021 by selling appreciated securities or doing Roth conversions.

The only thing I've been able to think of to manage this issue is to make my 2021 retirement plan contributions Roth rather than traditional, but that's only $12K because that's the amount of my earned income (I have a solo 401(k)). This is mathematically the same as doing a $12K Roth conversion.

Is there anything else clever and legal I can do that would push income from 2022 into 2021? Obviously I believe the answer is no or else I'd be doing it instead of asking for advice.

Reply to
Roger Fitzsimmons
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There are a few other ways you can accelerate income into 2021 to help optimize your multi-year taxes, but they may not be as effective as selling appreciated securities or doing Roth conversions. Here are a few options:

  1. Accelerate income-generating activities: If you have a business or rental property, you can try to accelerate any income-generating activities into 2021 to increase your taxable income for the year.

  1. Take a distribution from a retirement plan: If you have a traditional IRA, you can take a distribution before December 31st to increase your taxable income for the year. Keep in mind that this distribution will be subject to income tax and may have other implications, such as causing a loss of eligibility for certain tax credits or deductions.

  2. Defer deductions: If you have any deductions that you can defer until 2022, such as charitable contributions or business expenses, you can choose to delay these until next year to reduce your taxable income in 2021.

  1. Accelerate capital gains: If you have any assets that have appreciated in value, you can sell them before December 31st to realize capital gains and increase your taxable income for the year.

Keep in mind that these options may have unintended consequences and it is important to consult with a tax professional before making any decisions that may affect your taxes

Reply to
Smart Bean

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