After a prolonged job layoff, these tax strategies can provide a 'silver lining,' an advisor suggests.

• A temporary lower federal income tax bracket can be a positive aspect of a job layoff, according to certified financial planner Jaime Quinones of Stockade Wealth Management.
• Tax planning opportunities, such as Roth individual retirement account conversions or the 0% capital gains bracket, could be offered.
• Before making any financial decisions, it's important to run tax projections for the year and consider your financial goals.

Although the job market is competitive, experts suggest that prolonged unemployment and lower income in 2024 could provide an opportunity for tax planning.

A temporary lower federal income tax bracket resulting from a job layoff can provide opportunities for future tax savings, according to certified financial planner Jaime Quinones of Stockade Wealth Management in Marlboro, New Jersey.

A five-day return to office is unlikely, according to a Stanford economist.

If you go without regular income for three to four months, your 2024 tax bracket could decrease, according to Quinones. However, higher income from your next job could offset some of the reduction.

Tax planning experts suggest considering these opportunities if you anticipate lower income in 2024.

Weigh a Roth individual retirement account conversion

A more appealing strategy in a lower-income year is to convert pretax or nondeductible IRA funds to a Roth IRA, as advised by CFP Catalina Franco-Cicero of Tobias Financial Advisors in Plantation, Florida.

Although you'll still owe regular income taxes on the converted balance, your bill could be lower in a smaller tax bracket, she said.

Franco-Cicero stated that converting funds to a Roth IRA can provide tax-free growth and future tax-free distributions.

She suggested waiting until the end of the year to decide on a strategy, as she didn't have a clear idea of her projected income for 2024 yet.

Leverage the 0% capital gains bracket

Experts suggest that if your income is low enough, you could use the 0% long-term capital gains tax bracket to rebalance a taxable portfolio or save on future taxes.

In 2024, you may be eligible for the 0% long-term capital gains rate if your taxable income is $47,025 or less as a single filer or $94,050 or less as a married couple filing jointly.

"According to Quinones, the 0% bracket is quite broad, particularly for married couples. Even if you earn six figures, you could still fall into this bracket."

The bracket is based on taxable income, which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

Resetting the basis of an asset by selling and repurchasing it is a benefit of the 0% bracket, which can help you save on future capital gains, according to experts.

Before harvesting gains, you should run projections of your 2024 taxable income.

You also need to consider long-term plans for the asset.

When you pass away, taxable assets left to heirs will receive a stepped up basis, as explained by Quinones.