2023 Year-end Tax and Financial Planning for Individuals

As we wrap up 2023, it’s important to take a closer look at your tax and financial plans and discuss steps to reduce taxes and help you save for your future. With the current political climate, there has been minimal tax legislation. Looking to the future, the potential for change is on the horizon, and we continue to closely monitor any potential tax legislation and update you accordingly.

Charitable contribution planning

If you are planning to donate to a charity, it’s likely better to make your contribution before the end of the year to potentially save on taxes. There are many tax planning strategies we can discuss with you about charitable giving.

  • Consider donating appreciated property (such as securities, real estate or artwork) that have been held for more than one year, rather than cash. Note that an appraisal may be needed for certain property.
  • Opening and funding a donor advised fund (DAF) is appealing to many as it allows for a tax-deductible gift in the current year and the ability to dole out those funds to charities over multiple years. Not only do you get a deduction for the FMV of your appreciated stock, but you save on taxes by not recognizing the capital gains on appreciation.
  • Qualified charitable distributions (QCDs) are another option for certain older taxpayers who don’t typically itemize on their tax returns. If you have a required minimum distribution (RMD) from your retirement accounts, this could be a great strategy for you. 

Note that it’s important to have adequate documentation of all donations, including a letter from the charity for donations of $250 or more.

Required minimum distributions (RMDs)

You cannot keep retirement funds in your account indefinitely. RMDs are the minimum amount you must annually withdraw from your retirement accounts once you reach a certain age (generally age 73). Failure to do so can result in significant penalties. There are also opportunities to roll retirement funds to a qualified charity to satisfy the RMD without incurring taxes. We can help you calculate any RMDs and plan for any tax exposure.

Digital assets and virtual currency

Digital assets are defined under the U.S. income tax rules as any digital representation of value that may function as a medium of exchange, a unit of account and/or a store of value. Digital assets may include virtual currencies such as Bitcoin and Ether, Stablecoins such as Tether and USD Coin (USDC) and non-fungible tokens (NFTs).

The sale or exchange of virtual currencies, the use of such currencies to pay for goods or services or holding such currencies as an investment, generally have tax impacts –– and the IRS continues to increase its scrutiny in this area. We can help you understand the tax and investment consequences. 

Energy tax credits

From electric vehicles to solar panels, “going green” continues to provide tax incentives. The Inflation Reduction Act of 2022 included new and newly expanded tax credits for solar panels, electric vehicles (EV) and energy-efficient home improvements. The rules are complex but there is still time for these credits to be beneficial in the current year. The most notable change to the EV credits is the requirement that the vehicle has final assembly in North America. If you are planning an EV purchase, please reach out as the list of qualifying vehicles has changed significantly.

Additional tax and financial planning considerations

We recommend you review your retirement plans at least annually. That includes making the most of tax-advantaged retirement saving options, such as traditional individual retirement accounts (IRAs), Roth IRAs and company retirement plans. It’s also advisable to take advantage of health savings accounts (HSAs) that can help you reduce your taxes and save for medical-related expenses.

Here are a few more tax and financial planning items to discuss with us:

  • Life changes –– Let us know about any major changes in your life such as marriages or divorces, births or deaths in the family, job or employment changes, starting a business and significant expenditures (real estate purchases, college tuition payments, etc.).
  • Capital gains/losses –– Consider tax benefits related to using capital losses to offset realized gains –– and move any gains to the lowest tax brackets, if possible. Also, consider selling portfolio investments that are underperforming before the end of the year. Net capital losses can offset up to $3,000 of the current year’s ordinary income. The unused excess net capital loss can be carried forward to use in subsequent years.
  • Estate and gift tax planning –– Let’s make sure you’re appropriately planning for estate and gift tax purposes. There is an annual exclusion for gifts ($17,000 per donee in 2023, $34,000 for married couples) to help save on potential future estate taxes. Review lifetime gift and generation skipping transfer (GST) opportunities to use additional exclusions and exemption amounts.
  • State and local taxes –– Remote working arrangements or moving your residency could potentially have tax implications to consider. Let us help you with your state income, sales and use tax questions.
  • Education planning –– Save for education with Sec. 529 plans. There can be income tax benefits to do so, and there have been changes with the way these funds can be used. We can help you with any questions.
  • Updates to financial records –– Determine whether any updates are needed to your insurance policies or beneficiary designations.
  • Roth IRA conversions –– Evaluate the benefits of converting your traditional IRA to a Roth IRA to lock in lower tax rates on some of your pre-tax retirement accounts.
  • Estimated tax payments –– With underpayment interest rates being on the rise (currently at 8% for federal), let’s review withholding and estimated tax payments and assess any liquidity needs.

Year-end planning equals fewer surprises

Whether it’s working toward a tax-optimized retirement or getting answers to your tax and financial planning questions, we’re here for you.


Standard Deduction & Personal Exemption Increase

Standard Deduction and Phase-Out Levels

The basic standard deductions are:




Married, filing joint return



Surviving spouse



Head of Household



Unmarried (not surviving spouse or head of household)



Married, filing separate return



"Kiddie" standard deduction alternative amount



The additional standard deduction amount for the aged and blind (if the individual is also unmarried and not a surviving spouse, $1,950 in 2024 and $1,850 in 2023). $1,550 $1,500

Personal Exemption Amounts




Personal exemption amounts $0.00 $0.00

The phaseout of the personal exemption deduction is suspended for tax years 2018 through 2025. 

Gift Tax Exclusion

The annual gift tax exemption is $18,000 in 2024 and $17,000 in 2023.


Social Security Limits

The social security tax rate remains at 6.2% for both employee and employer.

The Medicare tax rate remains at 1.45% for both employee and employer.

  2024 2023
Social Security Wage Base $168,600 $160,200
Medicare No Limit No Limit

The Maximum Amount of Earnings and Still Receive Full Benefits

  2024 2023
Under Full Retirement Age $22,320


Year Reaching Full Retirement Age $59,520 $56,520
Over Full Retirement Age No Limit No Limit

Full retirement age (also called "normal retirement age") has been 65 for many years. However, beginning with people born in 1938 or later, that age will gradually increase until it reaches 67 for people born after 1959.

Financial Planning Process

Often the first area that comes to mind with financial planning is investing. Although a sound investment strategy is one of the important aspects of financial planning, it should be considered as part of an overall plan. The Institute of Certified Financial Planners (ICFP) defines financial planning as follows:

Personal financial planning is the organization of an individual’s financial and personal data for the purpose of developing a strategic plan to constructively manage income, assets, and liabilities to meet near and long-term goals and objectives. Important to the success of the personal financial planning process is the monitoring and periodic review of the plan to assure that it continues to meet the individuals’ needs.

The financial planning process is generally divided into seven different functions:

  1. Determine goals and objectives and identify resources and means to achieve them.
  2. Gather relevant data.
  3. Review and analyze data
  4. Prepare preliminary analysis of current financial situation and reassess goals.
  5. Present a report and make recommendations.
  6. Implement or coordinate implementation of recommendations.
  7. Monitor performance and update plan.

The focus of financial planning is on seven areas that include the following:

  1. Retirement and financial independence planning - Much of the burden and risk of planning for retirement has shifted from employers to employees. Also the availability of funds under our social security system is subject to change. A review of your expected retirement needs, along with assets currently available, the amount of your savings, and the length of time to your desired date of retirement should be considered.
  2. Integrating tax and financial planning - Careful consideration of income tax implications is necessary for decisions made during the financial planning process. Coordinating income tax planning concepts and issues with your financial planning goals and objectives should be implemented on an ongoing basis.
  3. Estate planning - Estate planning is also an important part of one’s financial plan to assure care of loved ones as well as for the managing, administering and distribution of your assets. An up-to-date will is essential, along with the possible use of a living (revocable) trust, and a durable power of attorney. Part of this process should include a review of how your assets are titled, since the best estate and financial plans can be thwarted by improper titling of assets.
  4. Risk management and insurance needs - Risk management and insurance planning calls for obtaining the appropriate amount of health, life, auto, homeowners, general liability, and long-term care insurance. The goal is to allocate premium dollars to reduce significant risk and exposures. This includes using the appropriate deductibles and, in some cases, deciding not to insure against a potential loss. However, one should never risk a large loss to save a small premium.
  5. Cash management, budgeting, and debt management - Current expenditures can be reviewed and a budget prepared that would document modifications based on one’s goals. Included would be a review of the terms of all outstanding debt to investigate opportunities to refinance at more favorable terms. Providing an emergency fund for contingencies is important. This can be accomplished with additional savings and/or a home equity line of credit.
  6. Education planning and income splitting - Education costs continue to increase at a higher rate than the rate of inflation. A review of the progress toward funding education should be completed along with investigating potential sources of financial aid.
  7. Investment planning and asset allocation - An appropriate investment strategy can only be made after considering the other components to one’s financial plan. In this fast changing world of investing, there are many opportunities available today not previously available. A good example is the increased popularity of online investing. Keep in mind, however, that studies indicate that a proper and wise allocation of investments is the largest determinate of investment success. For most, this is more important than individual stock selection or being able to potentially time the ups and downs of the market. One must be sure to distinguish between investing and speculating.

Determining the direction and priority of your financial goals can be a difficult task. For example, your retirement date and lifestyle expectations will determine how much you will need to save for retirement and how you will want to invest those savings. The following are some questions you can ask yourself that could assist with the financial planning process:

  • Have I established attainable goals?
  • Have I made a review of my current financial status?
  • Do I have a personal budget?
  • Do I have a contingency plan?
  • Do I have an estate plan?
  • Is my homeowner and auto insurance coverage adequate?
  • Is my life insurance coverage adequate?
  • Do I have an investment strategy and have I recently reviewed the components of my investment portfolio?

We hope the above provides a good overview of the financial planning process. Our assistance can range from informal consultations regarding the above areas to a more detailed analysis and financial plan preparation and implementation.

Record Retention Schedule

Retain Indefinitely

Audit reports  
Capital stock and bond records, ledgers, transfer registers, stubs showing issues, record of interest coupons, options, etc.  
Cash books  
Charts of accounts
Checks (canceled for important payments, i.e. taxes, purchases of property, special contracts, etc.) (filed with transaction papers)
Contracts and leases in force
Copyrights, patents, trademark registrations
Corporation charter, minute books and bylaws
Correspondence (legal and important matters only)
Deeds, mortgages, easements and other property records
Depreciation schedules
Financial statements (end-of-year, other months optional)
General ledgers and journals
Insurance records, current accident reports, claims, policies, etc  
Property appraisals
Property records - including costs, depreciation reserves, end-of-year trial balances, blueprints and plans
Tax returns and work papers, including records to support carrybacks and carryovers

Retain 7-8 years

Accident reports and claims (settled cases)
Accounts payable ledgers and schedules
Accounts receivable ledgers and schedules
Bank statements  
Canceled checks (except checks kept permanently)
Contracts and leases (expired)
Expense analysis and expense distribution schedules
Inventories of products, materials and supplies
Invoices to customers  
Invoices from vendors
Maintenance and repair records (buildings and machinery)
Notes receivable ledgers and schedules
Option records (expired)  
Payroll records and summaries, including payments to pensioners and timesheets
Plant cost ledgers  
Purchase orders (purchasing department copy)  
Sales records  
Scrap and salvage records (inventories, sales, etc.)  
Subsidiary records  
Time books  
Voucher register and schedules  
Vouchers for payments to vendors, employees, etc. (includes allowances and reimbursement of employees, officers, etc. for travel and entertainment)

Retain 6 years

Commission reports  
Employee disability benefits records  
Employee withholding tax statements
Equipment leases (after expiration)  
Fire damage reports  
Monthly trial balances

Retain 2 years and less  

Purchase orders (except purchasing department copy)  
Receiving sheets  
Stenographer's notebooks  
Stockroom withdrawal forms

* The above listing is only a guide and is not all inclusive. If you have any questions or need additional information, please contact us at (540) 662-7070.

Current Mileage Rates

The standard mileage rate for business mileage (in lieu of using actual expenses), as well as the standard rates for use of your car for medical and moving or charitable purposes are as follows: 


Jan. 1 - Dec. 31, 2024

Jan. 1 - Dec. 31, 2023

Business 67 cents/mile 65.5 cents/mile
Medical & Moving 21 cents/mile 22 cents/mile
Charitable 14 cents/mile 14 cents/mile

Current Minimum Wage Rate

The current FEDERAL minimum wage for covered nonexempt employees is $7.25 per hour effective July 24, 2009.  As of January 1, 2024 Virginia minimum wage will remain at $12.00 per hour and Maryland has mandated a minimum wage of $15.00 per hour.

Retirement Plans

Below are the annual contribution limits on elective deferrals for retirement plans.

Indexed Contribution & Benefit Limits for Qualified Plans

Type of Plan 2024 2023
Individual Retirement Accounts (IRAs)* $7,000 $6,500
Section 401(k) plans or SAR-SEPs*


Section 403(b) plans* $23,000 $22,500
Section 408(p)(2)(E) SIMPLE Contributions* $15,500 $15,500
Section 457(b)(2) limit* $23,000 $22,500
Section 415 limit for:    
      Defined contribution plans^ $68,000 $66,000
      Defined benefit plans $275,000 $265,000
Highly compensated employees Section 414(q) $155,000 $150,000
Top Heavy Key Employee Officer compensation limit $220,000 $215,000
Governmental "Grandfathered" plan compensation limit $490,000 $490,000
      *Age 50 Additional contributions    
      401(k) type plans $7,500 $7,500
      SIMPLEs $3,500 $3,500
      IRAs $1,000 $1,000
     ^ The Section 415 compensation limit for defined contribution plans is $345,000 for 2024 and $330,000 for 2023.

Roth IRAs 

- Nondeductible Contributions    
- Qualified tax-free distributions    
- AGI limit for maximum contributions: 2024 2023
  Joint filers $230,000 $218,000
  Individual filers $146,000 $138,000

Health Savings Accounts

Contribution Limits 2024 2023
Individual, self-only $4,150 $3,850
Family Coverage $8,300 $7,750
Catch-up for those age 55 and older $1,000 $1,000

For 2024 and 2023, the minimum deductible for a high-deductible health plan (HDHP) is $1,600 in 2024 and $1,500 in 2023 for self-only coverage and $3,200 in 2024 and $3,000 in 2023 for family coverage.  The maximum out-of-pocket limit is $8,050 in 2024 and $7,500 in 2023 for self-only coverage and $16,100 in 2024 and $15,000 in 2023 for family plans.