Year End Moves As we enter the beginning of the end of 2022, I can only think of the Grateful Dead lyric, “what a long, strange trip it’s been.” And while I couldn’t blame anyone for being Dazed and Confused these days, I want to point out a few simple year-end strategies that may have a big financial impact on you.Given that taxes are most of my clients’ largest expense, it’s no surprise that most strategies focus on tax-related moves.Do the Bracket BumpMove number one: bump your bracket. My dad fed our family as a general contractor specializing in underground construction. He won or lost jobs at blind bids, where he put in a price at which he was willing and committed to complete the job. On bid day, I’d have two questions for him upon his return from the office. (These would usually be asked as I racked for a game of eight ball after putting Merle Haggard on the stereo.) First, “did you get the job?” If he said yes, I would follow up: “How much did you leave on the table?” This refers to the gap between his winning bid and the next lowest, that is, the amount of money he could have earned and still secured the contract. Leaving too much green on the table turns a win into a psychological loss.I’ve brought this concept to my financial planning practice, in which I encourage clients not to leave anything on the table if they find themselves in low tax brackets. The U.S. tax code is progressive, which means if you can keep your “taxable” income modest, you will pay very little income tax. For retirees, this may mean they are in the 12 percent bracket in early years only to jump to 22 percent with RMDS kicking in in later years. Don’t waste the low 12 percent bracket.The simple strategy is to “bump” your income to take full advantage of the lower bracket. Options include taking a withdrawal and investing it in a non-qualified account or converting it to a Roth IRA and never paying tax on it again. Each of these strategies will pay off big in future years for you or your heirs.IRMAA Is Not Just a HurricaneHow do you feel about paying extra for Medicare? You most certainly will, without any extra services, if your Modified Adjusted Gross Income (MAGI) exceeds $91,000 per person in 2022. Earn $91,100--$100 above the limit-- and you’ll pay $973 a year more for Medicare Part B and D. That’s a take rate of more than 800 percent! There are other income thresholds as well.This is the Income-Related Monthly Adjustment Amount (IRMAA) and it’s often triggered by unwanted RMDs once you mature to age 72. The simple solution is to plan, in advance, to lower RMDs. If the threshold is $91,000, consider withdrawing or converting pre-tax retirement assets to Roth IRA assets to approach but not exceed this threshold. If you find yourself paying IRMAA, make sure you use the entire allotted bracket. Call it IRMAA optimization.IRMAA is driven by MAGI not by taxable income so traditional charitable contributions will not lower it. People who are 70.5 years old can send non-profit organizations money directly from an IRA--a Qualified Charitable Contribution (QCD), which will reduce their income for purposes of IRMAA.Do the Roth ConversionRoth conversions are both a tool and a strategy. They are a tool for IRMAA optimization and bracket bumping. They can be a strategy to take advantage of stock market dips, converting and therefore paying taxes as temporarily depressed prices. The simple strategy is to optimize tax brackets or Medicare limits and keep a keen eye for distress in financial markets. That’s the time to strike for big results.It’s Harvest SeasonLook for year-end tax loss or gain harvesting opportunities. These shouldn’t be hard to fine in 2022. Under the current tax code, you always pay lower taxes on capital gains than on your earned and ordinary income. Better yet, if you fall into the 12 percent bracket you will pay nothing--zero percent, my favorite tax rate. One strategy involves selling losing investments to offset other gains or even $3,000 of ordinary income. This should be an ongoing, not just a year-end, strategy, but year-end provides the last chance to deploy it. Another, less intuitive, strategy is to take only gains. If you are in the 12 percent tax bracket, this simple move will free up funds or just reset your tax basis higher at no cost. This may pay off big later.Bring on 2022Working with my clients, an often-expressed sentiment is that 2023 cannot come too soon. Whether or not that’s the case for you, take a few minutes to reflect on some good things in 2022 and some last-minute moves that might benefit you and your loved ones financially.Michael Lynch CFP is a financial planner with the Barnum Financial Group in Shelton, CT, where he focuses on his clients’ finances so they can focus on their lives. He teaches consumer-oriented financial planning courses for leading organizations, including Madison Square Garden and Yale New Haven Health Systems. He is a member of Ed Slott’s Elite IRA Advisor Group and the author of Keep It Simple, Make It Big: Money Management for a Meaningful Life, October 2020, and It’s All About the Income: A Simple System For a Big Retirement, May 2022. You can find more articles and videos at www.simpleandbig.com. He can be reached at email@example.com or 203-513-6032.Securities, investment advisory and financial planning services offered through qualified registered representatives of MML Investors Services,LLC. Member SIPC. 6 Corporate Drive, Shelton, CT 06484, Tel: 203-513-6000. Any discussion of taxes is for general informational purposes only, does not purport to complete or cover every situation, and should not be construed as legal, tax or accounting advise. Clients should confer with their qualified legal, tax and accounting advisors as appropriate.