Mastering Year-End Tax Planning: Five Essential Strategies for California Families

Year-End Tax Planning

Time to Get Ahead of the Game

The end of the year can be overwhelming, especially when juggling family activities, holidays, and planning for the year ahead. But amidst the chaos, there’s a golden opportunity to revisit your financial strategy. This is where year-end tax planning comes into play. Just like the case of singer Aretha Franklin, who passed away without a proper estate plan, leaving her estate subject to hefty taxation, you can avoid such pitfalls by planning ahead. Here are some steps you can take to make the most of your year-end tax planning.

Maximize Your HSA Contributions for Tax Benefits and Future Healthcare

A Health Savings Account (HSA) is a fantastic tool for managing healthcare costs while minimizing your taxable income. But, according to Forbes, fewer than 25% of HSA account holders maximize their contributions.

To highlight the importance, let’s consider the case of Alex Rodriguez, who had to dip into his HSA to pay for emergency surgery. His HSA, which he had been contributing the maximum amount (for 2023, contribution limits are $3,650 for individuals and $7,300 for families, with another $1,000 catch-up allowable if over age 55), allowed him to weather the crisis. For 2023, the contribution limits are $3,650 for self-only coverage and $7,300 for family coverage.

Invest in Your Loved Ones’ Education with a 529 College Fund

Contributing to a 529 college savings plan isn’t just an investment in the future of your children or grandchildren; it’s also a great tax move. However, the Wall Street Journal reported that only 29% of parents use 529 plans to save for college. Let’s buck that trend and prioritize future education with tax-smart planning.

Remember Felicity Huffman and the college admissions scandal? Imagine if those funds had been appropriately channeled into a 529 plan instead. Your contributions are state-tax deductible and grow tax-free when used for qualified education expenses.

Fine-tune Your Tax Withholdings

Have you experienced significant life changes this year, like marriage or the arrival of a new family member? Then it’s time to review your W-4 form to adjust your tax withholdings. CNBC reveals that nearly 73% of taxpayers overwithheld their taxes in 2019.

Don’t let that be you; review your withholdings regularly. Failing to update could mean either overpaying taxes or facing penalties for underpaying.

Schedule Medical Procedures Wisely

When it comes to medical expenses, timing is everything. Think about model Chrissy Teigen, who openly discussed an elective surgery last year. Had she timed it strategically, she could have maximized her medical expense deduction. For context, in 2023, the IRS allows you to deduct qualified medical expenses that exceed 7.5% of your adjusted gross income.

According to Health Affairs, only 10% of Americans take advantage of medical expense deductions. Talk to your CPA to ensure you’re planning accordingly.

Looking Out for Your Family and Your Finances: Take Action Now!

Year-end tax planning isn’t just about closing out the current year on a high note. It’s a strategic move for your future and the well-being of your loved ones. Just like the story of the Smith family, who we helped create a comprehensive estate plan while optimizing their tax strategy, you can protect your family and finances for years to come.

Don’t forget to stay tuned for part two of our Year-End Tax Planning Strategies for California Families series, where we’ll delve even deeper into strategies to keep more of your hard-earned money where it belongs—in your pocket.

At the Law Office of Aisha M. Williams, APC, we are here to offer Californians comprehensive legal services, aiming to protect family bonds through careful estate planning. And if you haven’t established relationships with financial and tax professionals, we can help you build your team. Contact us to learn more.


This article is a service of the Law Office of Aisha M. Williams, APC, serving San Diego, Carlsbad, Escondido, and all of California. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love. That’s why we’ll start you with a  Family Wealth Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.d