Helpful Year End Planning Reminders


With 2019 coming to a close, it is important to ensure year-end planning items are completed before December 31. Whether they be for tax-planning, retirement or other financial planning purpose, the following are a few reminders of what you may need to review before ringing in the New Year.

Tax-Loss Harvesting

Tax-loss harvesting is the practice of selling securities in your taxable investment accounts at a loss and buying back the same security or a similar security after 30 days in order to avoid the wash sale rule and take advantage of the loss to limit your total realized capital gains for the year. If you are worried about the amount of realized long-term or short-term gains in your taxable accounts, please speak with a member of our team to discuss options for reducing your realized gains before December 31.

Retirement Plan Contributions and Roth Conversions

If you plan to maximize your contributions to your retirement plan, it is a good time to check your year-to-date contributions to ensure you are on track before December 31. If you need to make changes to your contribution amount, now is the time to update the contribution amount. Keep in mind, the maximum contribution for most employer-sponsored retirement plans (401k, 403b, 457, etc.) is $19,000 for those under age 50. For those who are age 50+, you can contribute an additional catch-up contribution of $6,000 for a total tax-deductible contribution of $25,000. If you plan on contributing to your traditional IRA or Roth IRA, you have until the tax filing deadline to make those contributions.

The deadline to complete Roth conversions is also December 31. So, if you plan on converting some of your traditional IRA assets to your Roth IRA for tax planning purposes, please give us a call today to ensure you have time to complete the necessary paperwork for your Roth conversion.

Required Minimum Distributions and Qualified Charitable Distributions

The deadline for your Required Minimum Distribution is December 31, so if you have not yet made your distribution, now is a great time to make sure your withdrawal is taken. If you do not plan on needing to use the RMD for living expenses and you are charitably inclined, a great alternative is the qualified charitable distribution (QCD). You may contribute all or some of your RMD to a qualified public charity in order to take care of your charitable gifting for the year and avoid paying tax on the withdrawal.

Charitable Contributions

With the new tax law greatly increasing the standard deduction, charitable gifting has become less advantageous in years past. However, it is still important to make those gifts before year-end if you plan on itemizing deductions to include charitable donations for your 2019 tax return. Options for charitable gifting include QCDs, gifting highly appreciated securities, contributions to donor-advised funds and gifting cash. For more information on these gifting options, please read our recent blog.

Financial Plan Updates

Now is a good time to schedule a meeting with your financial planner not only to ensure all action items have been completed pertaining to your specific plan. It is also a good time to review your current plan and discuss planning items for next year to have action items in place for retirement plan contributions, tax planning and any other areas relevant to your specific financial plan.

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