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A Financial Checklist for the Holidays

December 02, 2018
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A Financial Checklist for the Holidays


As the year draws to a close, most of us look to holiday planning, getting our house ready for guests and finding the perfect gifts. We might forget the importance of another type of planning for the holidays –making sure our financial house is in order at the end of the year.

Here is a list of things to consider before year-end:

  • Maximize company retirement plan contributions: Look into maximizing your retirement plan contributions (be careful of contribution limits).

  • Ensure you have taken any required minimum distributions (RMDs): If you’re 70½ or older, you’re required by the IRS to take RMDs from certain retirement accounts by December 31—or face a penalty equal to 50% of the sum you failed to withdraw. 

  • Reduce capital gains: Selling underperforming investments can help offset realized gains, but the breakpoints have changed. Gifting assets can reduce the size of your estate (but don’t forget the carryover basis and capital gains). Your tax or legal professional can help you navigate these situations if they apply to you. 

  • Inherited IRAs or Qualified Plans: RMDs may be the responsibility of the beneficiary, and you should take any required beneficiary distributions before December 31, 2018. 

  • 529 Contributions:  To take advantage of any state-income-tax benefits or to be eligible for the federal gift-tax exclusion contributions must be made prior to the end of the year. There are new regulations allowing 529 plan withdrawals that are tax-free at the federal level for K-12 education for public, private, or religious schools, but you should confirm with your tax professional if they are tax-free at the state level.

  • Check Flexible Spending Accounts balances: Don’t forfeit money in these accounts as many require that funds be used by the end of the year. Some plans offer grace periods or carry overs, just make sure you know the terms of your accounts.

Remember, the greatest gift you can give your loved ones – at the holidays or any other time of year – is a responsible and well-thought-out financial plan.

If you would like help reviewing your own year-end checklist, please contact us to schedule time to talk.

This communication is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.