top of page

It's Tax Review Time

Most common items that drive your taxes.


  • If your family dynamics changed, reevaluate your filing status and see what credits and deductions you might be eligible for.

  • Know which type of stock awards you own so you can plan for the tax implications.

  • Don't forget to report Roth conversion amounts and RMDs as taxable income.

  • Investment losses can be used to reduce tax exposure.

  • There is still time to make HSA and IRA contributions for 2023.

  • Evaluate tax planning strategies that might allow you to itemize in 2024.


Taxes are your largest expense, so tax planning becomes more important as your life evolves. If this key part of your financial plan is mismanaged, it can have a ripple effect on other areas of your plan.

Tax services are now included in our Private Client service offering, and tax return preparation is long underway.

To help you, we wanted to share the most common items that impact tax exposure.


If you said, “I Do” at any point in 2023, you can file a joint tax return with your spouse. Filing a joint return will allow you to take advantage of various benefits, deductions, and tax breaks that may not be available if you file separately. For example, if you elect married filing jointly (MFJ), the 37% tax bracket doesn’t kick in until your income is over $693,751 in 2023, but for married filing separately (MFS), it kicks in at $346,876 – a huge difference.

There are some specific situations where MFS might be beneficial, so make sure you discuss it with your advisor and/or CPA to determine the best filing status.


If your divorce was finalized in 2023, you will be required to file a single return for 2023. For some, this may mean less tax exposure, but if you were the sole income earner and/or a high-income earner, the smaller standard deduction and higher income tax brackets could mean owing more.

If you meet the requirements to file as head of household instead of single, you can take advantage of a larger standard deduction and wider income tax brackets.

Loss of Spouse

Did you become a widow/er in 2023? For tax purposes, the IRS considers you married for the entire year, so you are eligible to file as Married Filing Jointly for 2023 as long as you did not remarry. Going forward, you will be required to file as Single or Head of Household, unless you meet the eligibility requirements to use a Qualifying Widow(er) status in the two tax years following the year of your spouse's death.

If your spouse owned a taxable (non-retirement) investment account, you might be eligible for something called a step-up in basis. Just last year, FMI helped two clients navigate this and saved them $800,000 and over $1,000,000, respectively, in taxes.

With the loss of a spouse comes pain, grief, and uncertainty. On top of that comes the logistics of settling your spouse's estate. Be sure you have a relationship with an advisor and CPA who will help guide you through account consolidation and evaluate tax planning opportunities.

Growing family

Welcoming a baby in 2023 means you might be eligible to claim the Child Tax Credit (CTC) – a credit to help offset the cost of raising kids. If your qualifying child meets all eligibility requirements and your modified adjusted gross income (MAGI) is not more than $200,000 (Single) or $400,000 (MFJ), you’ll receive the full $2,000 credit. You can claim the credit for EACH qualifying child, and it is partially refundable – meaning, if you don’t owe taxes or the credit is more than the taxes you owe, you can get up to $1,600/credit back in your tax refund.

The Tax Relief for American Families and Workers Act of 2024, if passed into law, would temporarily modify and expand the CTC. The most notable change is the increase of the maximum refundable amount per child to $1,800 for 2023 taxes filed this year, with that amount again increasing the next two years. The base CTC, currently worth $2,000/qualifying child, would also be indexed for inflation starting this year.

Be sure to consult with your CPA and advisor to determine if you might benefit from this potential change and if you are eligible for any other credits including, the Child and Dependent Care Credit, Earned Income Tax Credit, and Adoption Credit. You might also consider adjusting your tax withholdings to increase your take-home pay in anticipation of receiving these credits.

Education savings

Don’t forget about your 529 Plan contributions! While you won’t receive any tax benefits at the federal level, over 30 states offer income tax deductions or credits for making contributions to a 529 Plan. Most states only provide the state income tax benefit if you contribute to your home state’s 529 Plan, but eight states do offer the tax benefit for contributions to any plan.

Equity Compensation

Depending on the type of equity compensation you receive (RSUs, ISOs, NQSOs), you’ll need to plan for the tax implications that vesting, exercising, and selling can have from year to year, so you can maximize your keep.

Restricted Stock Units (RSUs) are taxable as ordinary income in the year they vest. For example, if 100 shares of your company stock vested in 2023 at $100/share, you will have to include an additional $10,000 in taxable income for 2023. While that might not seem like a lot, that amount might push you into a higher income tax bracket and could increase your tax liability.

Incentive Stock Options (ISOs) can offer more control over when taxes are triggered and provide preferential tax treatment if certain holding periods are met. However, if you exercise (purchase) your ISOs, special alternative minimum tax (AMT) considerations will apply. For stocks whose market price is significantly higher than your exercise price, the tax liability could be significant.

Roth Conversions

Did you convert Pre-tax dollars to Roth? Any amount that was converted during 2023 should be reported as taxable income on your return. There are two ways you can pay taxes on this conversion:

1) Withhold a percentage of the conversion amount to pay taxes.

  • Considerations: You won't have to pay the tax bill out of pocket, but fewer shares will be converted and grow tax-free.

2) Pay the taxes with cash.

  • Considerations: You'll pay the tax bill out of pocket, but every single share will be converted and grow tax-free.

As you evaluate your Roth conversion strategy for 2024, consider Option 2 for paying taxes. Especially if we start to see the market pull back, you'll be able to convert more shares and have those grow tax-free, rather than selling shares at a discount to pay taxes.

Required Minimum Distribution (RMD)

The SECURE Act 2.0 increased the age for starting RMDs to 73. If you turned 73 in 2023 and haven’t taken your 2023 RMD yet, you have until April 1, 2024, to do so. But, keep in mind, you will still be required to take your 2024 RMD by December 31st this year and every year going forward.

If you did take a distribution from your retirement accounts, don't forget to report that as taxable income for 2023. RMD rules will continue to change over the next several years, so if you are approaching RMD age, work with your advisor and CPA to see how these changes might impact you.

Didn’t need your RMD to supplement spending last year? Consider making a Qualified Charitable Distribution in 2024 as a tax-efficient way to donate to your favorite charity.

Capital Losses

Did you sell any investments for a loss in 2023? While taking losses doesn’t feel good, they can be used in several ways to help reduce your tax liability each year.

1) First, losses can be used to offset realized gains partially or completely.

2) Then, remaining losses can offset your ordinary income up to $3,000.

3) Finally, any remaining losses can be carried forward for use in future years.

HSA/IRA Contributions

You have until April 15th to make 2023 contributions to these accounts.

Health Savings Accounts (HSAs) can offer triple tax-free benefits and help you save for unknown medical expenses in retirement. If you already contributed for 2023, don’t forget to report your contribution on your Form 1040 so you receive the tax deduction. If you haven’t contributed but are in a high deductible health plan, consider contributing for 2023 and develop a contribution strategy for 2024 so you can start building up your health care slush fund.

If Traditional or Roth IRA contributions were part of your 2023 financial plan, you still have time to make those contributions. This would include a Backdoor Roth IRA strategy which allows you to convert a non-deductible IRA contribution to a Roth IRA.

Note: If you realize gains on a conversion in 2024, the gains will be taxable in 2024.

Itemizing vs. Standard Deduction

Are your itemized deductions close to the standard deduction amount for 2023? You might be able to take advantage of some tax planning strategies that would allow you to itemize in 2024.

If you expect your medical expenses to be high this year (at least greater than 7.5% of AGI), that can put you over the standard deduction threshold. Or, if you are charitably inclined, bunching your donations in 2024 to make multiple years’ worth of donations might allow you to itemize in 2024.


Simply filing your tax return isn’t tax planning. Think of your tax return as your report card on tax management. It’s important to review your most recent tax return each year so you can proactively identify potential planning opportunities.

You work hard for your money. Find ways to keep more of what’s yours.


When you're ready, we can help in two ways:

1) Checklists

Want more comprehensive checklists? We have guides that outline nearly two dozen considerations to help you navigate your returns and start planning for future years.

Reply #checklist to the blog email you received, and we'll email them to you.

2) Free, 30-minute consultation

  • FMI is one of the only fiduciary advisory firms that includes tax preparation and planning as part of its services.

  • Click here to schedule your free consultation today to see how we can help.

Katie Blechschmidt, CFP®

Director of Client Success


bottom of page