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Chicago Office

350 N Orleans St,

Suite #9000n
Chicago, IL 60654
End of Year Tax Planning Checklist

End of Year Tax Planning Checklist

October 02, 2023

Are you ready to review your tax plan? Do you have a tax strategy or written tax advice from your tax advisor we should be aware of? 

Either way, the fall brings in two major financial planning conversations to complete before the end of the year. One of them is tax planning.   


Tax planning is an essential part of the financial planning process. Depending on the nature of your return, tax planning may be fairly simply to very complex. Having a regular conversation about taxes can help identify the following:


1) What is our tax bracket? 

2) How is our income taxed? 

3) Are there ways to reduce our tax obligations we are not currently taking advantage of? 

4) Should we take steps this year to take advantage of our projected tax bracket? 

5) What can we do today to reduce our taxes in the short term? 

6) What can we do now, that will provide intermediate or long-term tax benefits for our financial plan? 


In order to support a tax aware financial plan heading into next year, please provide a copy of your prior year tax return and a recent pay/earnings statement. Please share it in a secure manner by uploading a copy to your eMoney Vault or by sending a copy password-protected in a secure email.  


Next, let's schedule time to review and update your financial plan.


Click Here to Schedule Tax Planning Meeting 


Between now and 2026 there are several tax aware strategies to consider before individual income tax rates reset to pre-2018 levels.  


Link to - What are current tax rates? 

Six Key Conversations to have with Sterling Edge Financial and your Tax Advisor


1. Discover Missed Deductions: Ask about and review tax deductions. By carefully examining previous year's tax returns, we can identify any overlooked deductions or credits that could have potentially reduced your personal tax liability. Doing so can help you prepare for a meeting with your tax professional to ask questions that could help you capture additional tax savings or better understand your tax obligations and ways to manage them as taxes change. 

2. Evaluate Changing Financial Situations: Ask about future tax obligations based on current projected income trends / estimates. Comparing historical income, expenses, and deductions with current data helps us assess any significant changes in your personal financial situation. Understanding these shifts enables us to be aware of and capture opportunities in a changing environment. Is this a good year to pay more in taxes? Is this a good year to defer more in taxes?  

3. Optimize Retirement Contributions: Ask about contributions to retirement and deferred compensation accounts such as (IRAs, 401(k), 403(b), 457 plans, SEP IRAs and SIMPLE IRAs). If excess cash flows or cash exist, consider and discuss increasing funding before the end of the year or tax filing deadline.  


4. Plan Ahead for Estimated Taxes: Reviewing prior year's tax returns empowers us to estimate upcoming tax liabilities accurately and plan accordingly throughout the fiscal year ahead. By proactively assessing potential quarterly estimated payment requirements now, we can help prevent penalties associated with underpayments and ensure cash flows and cash are available to meet your tax obligations. 


5. Evaluate and discuss alternative investments with special tax benefits or treatment. You won't find these offerings online or with a discount broker. These investments tend to be more complicated and can compliment a core investment strategy by providing additional diversification with large one time or ongoing tax deductions, credits or tax-preferred income. Like all investments, be sure to understand the details of the investment and make sure it creates value for you above and beyond just a tax deduction.  


6. Don't let concern for taxes drive or support irrational expenses.  A common mistake we see consumers make is chasing additional tax deductions and losing site of the cost. If you spend an extra $25,000 to reduce your tax burden, it might only save you $7,000 in taxes. Make sure you didn't just spend an extra $18,000 to spite the tax man.    

At Sterling Edge Financial, we do not file tax returns or offer tax preparation services. We do not provide explicit tax advice. We provide ongoing tax strategies, awareness, education and courses of action that can have large impact on your tax obligations now and in the future.  Including help you meaningfully implement recommendations provided by your tax professional.