Tax season is right around the corner with deadlines to file for certain benefits nearing. With many economic headwinds that could have made investments and tax planning complicated this year, Nora Yousif, RBC Wealth Management Vice President and Financial Advisor, joins Yahoo Finance to let investors know the best way to handle tax season no matter which tax bracket they may be in.

One deadline that Yousif highlights is the last day to take advantage of tax-loss harvesting. "Friday, December 29th, is the last day of the year, that you can tax-loss harvest, which means, you sell stock you made a significant profit on, probably in tech, so you realize those capital gains and offset previous years' capital losses, probably from 2022, to minimize your tax hit this year. Also before rates lower, consider municipal bonds if you're in a higher tax bracket because interest you earn could be both federal and state tax-free, and I'm buying a lot of these for clients right now," Yousif explains.

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Video Transcript

RACHELLE AKUFFO: This is the last week of the calendar tax year. That means it's time to tidy up your finances to maximize the amount of money that stays in your pocket during tax season. For more on what to prioritize after this year's market moves, Nora Yousif, RBC Wealth Management VP and financial advisor joins us this morning.

Good to have you on the show. So a lot of investors wondering what to do. They have a deadline of December 29th, as you laid out in your notes. What do people need to know about what to prioritize in this final week?

NORA YOUSIF: Well, Rachelle, it really depends which side of the coin you're on. If you're in an unusually low tax bracket this year, having been let go or quit your job to start a business, check with your CPA, because this could be the year to do one of three things. Sell off some of your profitable investments if you want to raise some cash and diversify more, because you could potentially pay nothing in capital gains taxes as opposed to paying 15% or 20% federally, and to pay nothing your total income has to be under $45,000.

Two, exercise some stock options for the same reason. You're at a lower capital gains rate or income tax bracket. Or three, consider converting some of your IRA investments into a Roth IRA so you pay the piper now while at a lower tax bracket, potentially never having to pay taxes on future growth or withdrawals.

Now, if you're in an unusually high tax bracket this year, talk to your CPA about either, again, three things. Push out income or your bonus into 2024. Doing what you need to to itemize. Itemizing is a beautiful thing, because you can deduct your charitable donations, property tax, mortgage, interest like the good old days. Or lastly, three, if you're a business owner, you're going to like this. Spend, spend, spend. Buy up as much of your 2024 expenses now, as you can deduct them in this calendar year.