2023 Year-End Strategies – Pierson Wealth Management

As the final weeks of 2023 approach, a window of critical planning emerges with opportunities to optimize tax savings and avoid potential pitfalls. Consider taking advantage of the strategies outlined below before the December 31 deadline:
Required Minimum Distributions (RMDs): IRA owners age 73 or older must fulfill their RMD obligations to avoid a hefty penalty on the funds not taken.
Qualified Charitable Distributions (QCDs): Embrace tax-free QCDs that can not only satisfy RMD requirements but also permit individuals aged 70½ or older to transfer up to $100,000 tax-exempt to charitable causes from their IRA.
Roth Conversions: Given historical trends of rising tax rates, contemplate converting your Roth into a traditional retirement account now to preempt higher future tax burdens.
Leverage Net Unrealized Appreciation (NUA): The NUA strategy can result in significant tax savings by utilizing long-term capital gains rates, as opposed to ordinary income tax rates on company shares. 
Split IRAs into Separate Accounts: Beneficiaries must split inherited IRAs into separate accounts by December 31 to benefit from distribution rules. However, it is important to note that establishing these accounts with the custodian may take time.
Update beneficiary forms: Although there is no set deadline for updates, the end of the year is a good time to review beneficiaries in the wake of life events that may have occurred.
For information on how these year-end strategies can help your specific situation, contact us at (661) 297-7566 or visit www.PiersonWealthManagement.com.  
Securities and advisory services offered through Cetera Advisors LLC (doing insurance business in CA as CFGA Insurance Agency LLC CA Insurance Lic#0I32305), member FINRA/SIPC, a broker/dealer and a Registered Investment Adviser. Cetera is under separate ownership from any other named entity. Ivy Pierson CA Insurance Lic#0C92500. For a comprehensive review of your personal situation, consult with a tax or legal advisor. Neither Cetera Advisors LLC nor any of its representatives may give legal or tax advice. Converting from a traditional IRA to a Roth IRA is a taxable event. A Roth IRA offers tax free withdrawals on taxable contributions.To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.