2024 Tax Planning Isn’t Over

Yes, I’m the one who is always telling you to look through the windshield and not the rearview mirror, but every now and then, we have to take a minute to make sure we’ve taken care of everything we need to before we get too far down the road. Q1 of every year is one of those times. There are still planning opportunities related to the previous calendar year that we can take advantage of, but we have to be aware of them and then get proactive.

Especially at a time when potential tax changes are so prevalent in the news, it helps taxpayers (including YOU) feel some small sense of control to be able to take action, even if it feels like a little thing. So especially for clients who are still in their accumulation years, now is a great time to be taking a look and making sure they’ve taken advantage of the opportunities available to them.

Some of these are straightforward, like maxing out what’s left of an HSA limit.

Some take a bit of math, like figuring out how much can be contributed to a solo 401(k).

Others take a clear road map to make sure you’re adding value and not creating chaos: like backdoor Roth contributions. Since we can’t change the rules and make this opportunity simpler (Congress still doesn’t return my calls), we just have to look at it as an opportunity to deliver massive value. The extra time it takes to have a system for smooth execution means that you are setting yourself apart and providing a service clients are unlikely to do on their own and rarely find somewhere else.

Whatever you ultimately evaluate for a client, whether it’s the right fit for them this year or not, make sure you tell them you did (aka apply the Dishwasher Rule). Clients get exactly zero peace of mind if you are doing tax planning for them they know nothing about.

Happy Tax Planning!

P.S. If you’re looking for resources on getting backdoor Roth contributions done right, check out the reference guide and masterclass we created on the topic.