Things to Keep in Mind for 2024
Some key Financial Data changes for 2024:
| Annual gift exclusion | $18,000 |
| Estate tax exclusion | $13,610,000 ($27,220,000 for couples) |
| IRA/Roth contribution limit | $7,000 (+$1,000 "catch-up" at 50+) |
| 401(k) contribution limit | $23,000 (+$7,500 "catch-up" at 50+) |
| SIMPLE contribution limit | 16,000 (+$3,500 "catch-up" at 50+) |
| HSA contribution limit (individual) | $4,150 ($1,000 "catch-up" at 55+) |
| HSA contribution limit (family) | $8,300 ($1,000 "catch-up" at 55+) |
| Qualified Charitable Distribution limit | $105,000 |
For tax planning:
- The Standard Deduction for a single tax filer is going from $13,800 up to $14,600
- For married filing jointly, it is going from $27,700 up to $29,200.
We talk about these numbers when we discuss charitable giving; if your deductions are not more than the standard deduction amount, there may be a better way to achieve your philanthropic goals. If your total charitable contributions will not help you to exceed your standard deduction for a year, it may be worthwhile to ‘bunch’ or group your charitable donations into a single year. By delaying charitable contributions from one year to the next and combining them with the second year’s donations, the sum of the contributions in year two may result in total itemized deductions that exceed the standard deduction amount.
Bunching can be a very efficient and effective tax-savings tactic if you are planning a significant charitable gift. Many non-profit organizations, i.e., colleges, universities, as well as others building endowment funds, strategically spread their specific fundraising campaigns over a number of years to maximize the potential benefit to donors. If you desire to gift to such a campaign, we recommend you tactically schedule your contributions for the campaign year(s) when you have elevated income, and the gifts will offer you the greatest tax savings.
We also wanted to share one of our favorite strategist’s 2024 Equity Market Outlook. I have been following Mike Gibbs’s work and using his research pieces in client meetings since he came over to Raymond James in 2012 through the acquisition of Morgan Keegan. He has a genuine, old-school, no-nonsense writing (and speaking) style and we find that we most often agree with his views. While not always perfectly right, it is difficult to question the logic he uses in making investment decisions.
We wish you all a healthy and peaceful 2024!
-Gary Weiss, January 2024
