Year End Tax Planning Tips For All The Procrastinators – Finger Financial Five #61

“What we call the beginning is often the end. And to make an end is to make a beginning. The end is where we start from.” -T.S. Eliot

Year-end tax planning for procrastinators; of course not you…

When I was a student at the College of Charleston, I wait until the time pressure far exceeded my desire to find useless things to do before I would start studying. I did ok, but could have done a lot better and could have made it less stressful if I’d studied a little along and along like my mom told me.

Same is true with tax planning. It is a whole year thing, not just end of year. Let me explain:

When markets are down, you want to look at taking tax losses. You also want to take a look at Roth conversions then, too. Why? Because you are moving money and paying taxes on the lower account value. When the money is placed in the Roth IRA, it is reinvested or if you transferred it over in kind, it has the potential to grow back in the tax-free Roth account.

Many people give to charity, but don’t get any tax benefit because they don’t itemize their taxes. Two ways to overcome this:

  • Give to charity directly from your IRA if you are over 70.5. This is called a Qualified Charitable Distribution. You are giving money with pretax dollars!
  • Bunch your charitable contribution into one year using a Donor Advised Fund, then itemize. Many people do this in combination with Roth conversions.
  • Naturally, check with your CPA on what is right for you.

Now for the procrastinators…

  • Make your 529 plan contributions before year end. Some states require contributions be made before year to get tax deduction. Check with your tax preparer to be sure.
  • Salary deferrals into retirement accounts must be done before year end.
  • Gifts must be given before year end. $15,000 is the limit without gift tax.
  • Look at the capital gains distribution you may have to pay on mutual funds you hold in taxable accounts. You could have not sold and STILL have had a taxable event.

Harvest gains if in 0% Long Term Capital Gains bracket. Must be under:

  • $40,400 for single filers
  • $80,800 for joint filers
  • For kids the first $2,300 of LTCGs is 0% assuming no other income.

Check your withholding on your IRA distributions — if it’s too little, up it. If you get a big refund, lower it.

Most importantly, listen to your MOM!!

For a refresher on what retirement planning is like, reread this.

On the lighter side, heading to Columbia to see my mom and sister over Christmas, then heading to see the Biltmore House in Ashville. I have never been and hear it’s fantastic.

Hope all is well with you and your family,


Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information.  My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions.

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.

This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.


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