2022 Year End Planning Opportunities

Key Takeaways

• Track year-end mutual fund distributions immediately—they increase your taxable income and can trigger higher Medicare premiums (IRMAA) or ACA health insurance costs, even if the money isn't visible in your account balance.
• Harvest tax losses in down market years by selling losing positions to offset capital gains, which directly lowers your taxable income and reduces health insurance premiums by approximately $100 per year for every $1,000 in income reduction.
• Make IRA contributions after receiving mutual fund distributions but before filing taxes to further reduce taxable income—you can contribute after the fact and still claim the deduction on your return.
• Be cautious with Roth conversions at year-end since they're taxable events that increase your current year's income, potentially triggering IRMAA surcharges for Medicare recipients or higher ACA premiums.
• Consult with an accountant before executing any tax strategy to ensure you understand capital gains/loss rules and avoid unintended consequences with your health insurance premiums or Medicare costs.