Amanda Lott

Head of Wealth Planning Strategy, Advice Lab

Adam Ludman

Tax Advisory, Advice Lab

Thomas McGraw

Head of Tax Advisory, Advice Lab

Jordan Sprechman

Practice Lead, U.S. Wealth Advisory

What you owe in taxes is not set in stone. Rather, it’s influenced by a number of fluid factors, including your state of residence, age, charitable and gift-giving activities, and whether you can (and do) benefit from available tax breaks.

That’s why we suggest you meet with your tax professionals as soon as possible to:

  • Finalize your 2023 U.S. tax returns
  • Confirm your plan to fund tax payments
  • Plan for 2024’s changing tax landscape

Here are 13 potential tax-optimization strategies to explore with your professional advisors.

Finalize your 2023 U.S. tax returns

It’s not too late to lower your 2023 taxes. Consider taking one or more of these five actions before the April filing date:

1. Contribute to IRAs

You can make contributions to your IRAs for the 2023 tax year, up until the deadline for filing your return (usually April 15), not including extensions.

With a traditional IRA, you can contribute up to $6,500 or – if you were 50 years or older in 2023 – up to $7,500 of your earned income. Moreover, those contributions are potentially deductible, and even if not, may be used for conversions to Roth IRAs and possibly doubled, even for non-working spouses:

  • With a Roth Individual Retirement Account (IRA), subject to certain limitations, you can make non-deductible contributions up to these same limits for 2023 with the benefit that all growth, and future distributions, will generally be tax-free1
  • If you own a business that offers a Simplified Employee Pension plan (SEP) or a Savings Incentive Match Plan for Employees (commonly known as a SIMPLE IRA), you have a grace period for making contributions to those accounts based on the due date of the business’s or employer’s tax return, including extensions

2. Distribute trust income

Trustees and executors have until March 5, 2024, to distribute income to beneficiaries and have those distributions treated as if they were made in 2023.

If a trustee has discretion over whether or not to make a distribution, the decision must be informed, always, by (a) the terms of the trust, (b) the trust’s income and transfer tax characteristics, and (c) the beneficiary’s best interests.

Only after weighing these factors should a trustee determine if a distribution makes economic sense – as it often does. The marginal U.S. income tax rate of many trust beneficiaries, including even some whose income exceeds $500,000, is well below the top 37% tax rate (i.e., generally the rate the trust would pay, as tax brackets for trusts are compressed at very low levels).2

3. Seek a SALT refund for pass-throughs

Several years ago, the Internal Revenue Service issued a notice that it intends to issue regulations saying pass-through entities (e.g., partnerships and S corporations) are exempt from the $10,000 deductibility cap on state and local taxes (SALT) at the entity level.3

Check your state’s laws to determine whether or not pass-through entities in that state can elect to use this deduction. (Not all entities can or would want to make this election.) Many states require these generally annual elections by March 15 for calendar-year partnerships, and these elections are ordinarily only applicable for the tax year when the election is made.

4. Invest in a QOF to defer qualified gains

Under special Qualified Opportunity Zone Fund (QOF) rules regarding short- or long-term capital gains:

  • You may have 180 days from the date of realization to invest the gains in a QOF and defer (perhaps for several years) payment of taxes that would otherwise be due
  • These rules apply to gains realized either directly or indirectly (e.g., through a pass-through entity, such as a partnership)

If you own an interest or shares in a pass-through entity that realized gains early in 2023, the date of realization for that sale may have been December 31, 2023, or will be March 15, 2024.4 Speak with your tax professionals to determine the relevant date of realization, and how to measure the 180-day period in your circumstances.

5. Make timely distributions of private foundation assets

The general rule is that to avoid penalties, private non-operating foundations must distribute at least 5% of their assets annually to public charities. But if needed, you may have as many as 12 additional months to make distributions, as there is, in effect, a 12-month grace period.

Thus, a private foundation with a December 31 fiscal year that is determined to have $1 million of assets – and therefore a minimum distribution requirement of $50,000 as of December 31, 2023 – has until December 31, 2024, to distribute that $50,000. A donor-advised fund (DAF) can be the recipient of the required distribution amount.

Check with your tax professionals to see what your private foundation’s final deadline for these distributions may be if the foundation’s situation requires more time.

Confirm your plan to fund tax payments

“While tax returns are often filed on extension, tax payments must, in all but the rarest cirucstances, be made by the mid-April deadline.”

6. Borrow – or sell select holdings

Borrowing against your portfolio of marketable securities can be a handy solution, especially if you expect an influx of cash in the relatively near future. The associated costs of borrowing, even at higher interest rates, may be outweighed by other considerations, such as not having to sell securities or other assets you’d prefer to keep.

You can’t deduct the interest on funds you borrow to pay taxes – but you can deduct the interest if you’re borrowing to invest, to the extent of investment income. So you might want to borrow to invest and deduct the interest paid on those borrowings – meanwhile using cash from other sources to pay your taxes.

If you don’t want to borrow, review your holdings: If your portfolio has both unrealized gains and losses, consider selling holdings that would produce no net capital gains, and then use the proceeds to pay the taxes due.

Plan for 2024’s changing tax landscape

There are some issues and opportunities particular to this year that you may want to consider as soon as possible:

7. Contribute more to tax-deferred accounts

In 2024, you can contribute $23,000 to your 401(k) account if you are under age 50, or $30,500 if you are 50 or older. Also: The combined amount your employer and you can contribute has risen to $69,000 or $76,500, respectively, depending on your age.

Further, a law enacted at the end of 2022 provides that employees may designate an employer’s matching contributions as Roth contributions, as long as the employee is 100% vested in any employer contributions.

Be sure that the withholdings from your pay are properly calibrated to account for these changes.

These figures also apply to self-employed defined contribution accounts. One relatively new option for SEP and SIMPLE IRAs: Up to 100% of the contribution can be designated as a contribution to a Roth account, which is significant, given the higher contribution limits for these plans.

In addition, if you’ll have a bonus (or other performance-based compensation) to set aside in a deferred compensation account, you may have only until June 30 to do so. Check with your employer to confirm your deadlines to make elections and to identify the maximum you might defer under the plan. Then, based on your cash flow needs now and in the future, you can decide what might be the appropriate amount for you to defer.

8. Note new guidelines for RMDs and QCDs

Required minimum distributions (RMDs): The mandatory starting age is now 73. Generally, RMDs have to be taken by December 31, but if you turn 73 in 2024, you are not required to take your first RMD until April 1, 2025. Any subsequent RMDs must be taken by December 31.

Remember, Roth IRAs are not subject to the RMD rules during the owner’s lifetime, and beginning in 2024, designated Roth accounts in a 401(k) plan (and certain other qualified plans) are not subject to the RMD rules while the owner is still alive.

RMDs are based on two factors: your age and the balances in your tax-deferred accounts on December 31 of the previous year. We think it’s generally a good idea to wait until the end of the year to take RMDs because asset values tend to rise. But always check with your financial and tax advisors to plan for when you must and should take your RMDs.

Qualified charitable distributions (QCDs): Before taking your RMD this year, decide whether you want to make a QCD to a public charity. Beginning this year, this amount is now inflation-adjusted, and has increased from $100,000 last year to $105,000 for 2024. A QCD counts toward the RMD amount. (Taxpayers can also contribute $53,000 of a QCD to charitable remainder trusts or charitable annuities.) And unlike the rest of an RMD, the QCD amount is excluded from your gross income.

But please note: You can’t claim a QCD as an income tax charitable deduction. Also, the QCD cannot be made to a DAF or any kind of private foundation.

Finally, if you own low-basis public securities in a taxable account and plan to donate only a finite amount to charity, you might be economically better off donating those securities to charity rather than making the donation via a QCD.

9. Donate appreciated stock

Following the equity market rally at the end of 2023, you likely hold some assets at a gain. As noted, it is extremely tax-wise to donate public equities, in kind, to a public charity – or to a DAF, private operating foundation or private non-operating foundation. Here’s why: In addition to receiving a deduction based on the fair market value of the stock you donate, you also avoid tax on the unrealized gain on those equities.

That said, beware: Make sure you’ve held the donated stock, unhedged, for more than one year. The holding period may be even longer if the securities were received in connection with services performed as a partner for certain profits interests (e.g., at a hedge fund, venture capital or private equity fund).

Also be sure the financial firm holding your shares donates the correct lot, and if that lot has ever been transferred from another firm, that the basis and holding period information is replicated correctly by the new firm.

10. Review quarterly estimated payments

Review both your actual 2023 and anticipated 2024 tax bills to determine your minimum necessary quarterly estimated payments for this year.

If you expect outsized income in 2024, compared to 2023, you may want to rely on the actual payments you made in 2023 to determine the estimated payments you make this year. This is because the law allows taxpayers to make estimated payments during the course of the year, interest- and penalty-free, up to whichever is less: (a) 110% of the prior year’s taxes, or (b) 90% of the current year’s taxes.

Thanks to this rule, you can keep more of your pre-tax income until the tax filing deadline in April 2025 and invest that income safely – such as in U.S. Treasuries maturing by next April.

11. Evaluate your choice of tax domicile

Many taxpayers have moved in recent years, in some part for tax reasons. It requires a great deal of planning (and sometimes triggers headaches!) to establish domicile in the state to which you want to pay taxes this year.

Also: It may be easier to switch the situs of a trust you’ve created, so review those as well. A trust governed by one state’s laws for administrative purposes may be subject to tax by a different state based on a number of factors, including the residence of the grantor and/or current trustees.

12. Optimize annual exclusion gifts

Consider making annual exclusion gifts (up to $18,000 per donor, per donee) early in the year so that any growth on these assets over the course of the year occurs off your balance sheet.

13. Harvest capital losses

Consider implementing a systematic program for harvesting capital losses for your securities portfolios. Doing so might help you take advantage of any market downturns while avoiding the wash sale rules so adverse to taxpayers – and to bank those losses to offset either already realized, or expected future, capital gains.5

While you’re reviewing your portfolio with an eye to harvesting losses, be sure to evaluate the tax efficiency of your holdings across all of your family’s accounts, including IRAs and trusts. A key contributor to growing family wealth over time is making sure the proper accounts own the proper assets. For instance, where possible, have tax-deferred accounts own tax-inefficient assets, and taxable accounts own tax-efficient assets. Asset location can be as important as asset allocation to wealth growth and preservation.

We can help

We closely monitor both potential and enacted tax law changes at the federal and state levels. While we don’t expect the current Congress to pass any laws that would materially affect ordinary income or capital gains tax rates, we do expect some action in the next Congress, that is to say in 2025.

Of course, the states could change their tax rates – and many did as of January 1, 2024.

There are many options you may consider for your 2023 taxes and to prepare for 2024 and beyond. Your J.P. Morgan advisor can work with your tax professionals to help decide which options are best suited for you.



The maximum a taxpayer may contribute directly to a Roth IRA is reduced, potentially to $0, if modified adjusted gross income is above certain thresholds. In addition, for all growth and distributions to be tax-free, taxpayers must meet certain requirements. See for details based on your specific tax filing status.


The top rate of 37% would apply to 2024 income in excess of $15,200 accumulated by a non-grantor trust. By contrast, the top 37% rate is reached by married taxpayers filing jointly only once income exceeds $731,200.


IRS Notice 2020-75.


The date of realization for that sale may be deemed to be either the end of the partnership’s tax year, generally December 31, or the year-end partnership tax filing due date, which is March 15.


The wash sale rule states, in essence, that a loss will be disallowed if a taxpayer sells a security at a loss and acquires the same or a substantially identical security (or an option on such security) within 30 days of either side of the date the loss was realized. The disallowed loss would be added to the cost basis of the substantially identical acquired security and generally recognized when the position is later sold.

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