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Wrapping Up The Year

It’s that time of year again. Holidays are approaching and the end of the year is winding down. Before you get in full on holiday mode, make sure you wrap up any loose ends before the end of the year so that you can spend your time relaxing and being present with your loved ones. Here’s a quick list of items that may be helpful.

  • If there is anything that you need to do for taxes for this year, now is the time to do it. There are only a few retirement contributions that you can make after December 31st that will still be counted for this tax year. Everything else needs to be done during the tax year for it to count.
  • Have some extra money and you didn’t maximize your 401k this year? You have until December 31st to make any additional contributions for the year.
  • Employee Benefits—have you confirmed your employee benefits for next year? Don’t forget that you need to re-elect any FSA and HSA contributions, they do not automatically carry forward.
  • Gifting—the annual exclusion amount for gifts is $16,000. This means that you can gift anyone up to $16,000 without having to pay any gift tax.
    • Charitable gifts are included on Schedule A-Itemized Deductions. Remember that in order to take your itemized deductions, they need to be more than your standard deduction. Check here to see what your standard deduction is.
    • Because standard deductions are relatively high, some options for taking your tax benefit for your generosity could be to lump several years’ worth of gifts into one tax year by utilizing donor advised funds.
    • If you are age 70.5, you are eligible to make gifts directly from your IRA to a qualified charity and never take that money into income at all. This is called a qualified charitable distribution.
    • See this blog post for more charitable giving ideas.
  • Insurance Plan Deductibles—if you have met your insurance deductible for the year, try to squeeze in any last appointments that you can before your deductible resets on January 1.
  • Tax Loss Harvesting—do you have large capital gains that you may want to offset? Review your holdings to see if any changes should be made in your taxable accounts.
  • Address Changes—don’t forget to update your address, if necessary, with all of the people that may send you something in the mail—particularly any tax forms.
  • RMD’s-Required Minimum Distributions-you must take your RMD’s by December 31st to avoid penalties. Wondering who is required to take RMD’s? See this article.

Financial Journey LLC is a registered investment advisor offering advisory services in the states of Florida, Alabama, Virginia and in other jurisdictions where exempted. Information provided is for educational purposes only and not, in any way, to be considered investment or tax advice.

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