Family Wealth blog

End of Year Tax Tips

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With so much going on in today’s world—both negative and positive—the last thing you may want to think about in late October is your taxes. However, with the end of the year rapidly approaching, now is a good time to take some steps that could help reduce your tax bill for 2022. For example, you may be able to defer income into next year or increase your retirement savings. If you’re over age 70½, you may also want to consider taking your required minimum distributions (RMDs) from your retirement accounts, if you haven’t already done so. Here are some things to consider as you weigh potential tax moves that would need to be made by the end of the year.

Defer Income to 2023

Consider opportunities to defer income to 2023, particularly if you think you may be in a lower tax bracket then. For example, you may be able to defer a year-end bonus or delay the collection of business debts, rents, and payments for services. Doing so may enable you to postpone payment of tax on the income until next year.

The IRS has made a few changes that will shift tax brackets starting in 2023.1 So, if moving income into next year would allow you to keep within a lower bracket this year, you might also have more wiggle room for the additional income next year.

Accelerate Deductions

You might also look for opportunities to accelerate deductions into the current tax year. If you itemize deductions, making payments for deductible expenses such as medical expenses, qualifying interest, and state taxes before the end of the year (instead of paying them in early 2023) could make a difference on your 2022 return.

Make Charitable Contributions

If you itemize deductions on your federal income tax return, you can generally deduct charitable contributions, but the deduction is limited to 50%, 30%, or 20% of your adjusted gross income (AGI). Cash contributions to public charities has been increased to 60%. The percentage also depends on the type of property you give and the type of organization to which you contribute. By the way, amounts in excess of these percentage limits can be carried over for up to five years.

Bump Up Withholding

If you are on a payroll and it looks as though you will owe federal income tax for the year, consider increasing your withholding on Form W-4 for the remainder of the year to cover the shortfall. Time may be limited for employees to request a Form W-4 change and for their employers to implement it in time for 2022. The biggest advantage in doing so is that withholding is considered as having been paid evenly throughout the year instead of when the dollars are actually taken from your paycheck. This strategy can be used to make up for low or missing quarterly estimated tax payments.

Save More for Retirement

Deductible contributions to a traditional IRA and pre-tax contributions to an employer-sponsored retirement plan such as a 401(k) can reduce your 2022 taxable income. If you haven’t already contributed up to the maximum amount allowed, consider doing so. For 2022, you can contribute up to $20,500 to a 401(k) plan ($27,000 if you’re age 50 or older) and up to $6,000 to traditional and Roth IRAs combined ($7,000 if you’re age 50 or older). The window to make 2022 contributions to an employer plan generally closes at the end of the year, while you have until April 18, 2023, to make 2022 IRA contributions. Note: Roth contributions are not deductible, but Roth qualified distributions are not taxable.

Take Required Minimum Distributions

If you are age 72 or older, you generally must take required minimum distributions (RMDs) from traditional IRAs and employer-sponsored retirement plans. Special rules apply if you’re still working and participating in your employer’s retirement plan. You have to make the withdrawals by the date required, and this is the end of the year for most individuals. This one is especially important, as the penalty for failing to do so is substantial: 50% of the amount that wasn’t distributed on time.

Weigh Year-end Investment Moves

You shouldn’t let tax considerations drive your investment decisions. However, it’s worth considering the tax implications of any year-end investment moves that you make. For example, if you have realized net capital gains from selling securities at a profit, you might avoid being taxed on some or all of those gains by selling losing positions. Any losses over and above the amount of your gains can be used to offset up to $3,000 of ordinary income ($1,500 if your filing status is married filing separately) or carried forward to reduce your taxes in future years.

The Takeaway

Consider this a quick checklist for tax-related actions you should be aware of as we head toward the end of 2022. This is by no means a complete list, and your situation—from income to investments to taxes in general—is unique. Also, don’t consider this to be professional tax advice. You should always consult with your tax professional when considering actions that affect your short-term and long-term financial situation.


“2022 Year-End Tax Tips,” Broadridge Advisor Solutions, October 25, 2022


Disclosure: This information is for educational and informative purposes and shall not be considered a specific recommendation. Readers are advised to speak with their advisor at JL Bainbridge to determine their specific recommendations that meet their investment objectives and to review their portfolios. The material being provided is thought to be accurate. However, the information is compiled from multiple resources and may become outdated or otherwise rendered incorrect by new research or corrections without notice. J.L. Bainbridge & Co., Inc., is not a broker dealer and does not offer tax or legal advice. Please consult your tax or legal advisor for assistance regarding your individual situation. It should neither be assumed that future results will be as profitable or that a loss could not be incurred. For more information related to our firm, please see our disclosure brochures at and

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