posted on November 9th 2016 in Austin CFP Team Posts with 0 Comments /

Here’s a fourth quarter “Top 10 To Do List” of items that have a year-end deadline:

  1. Make sure you take out your Required Minimum Distribution (RMD) if it applies to you or be liable for a 50% penalty on the amount that should have been withdrawn.
  2.   If your income tax bracket is low this year, consider whether doing a Roth conversion is appropriate.
  3. Sell your losing positions in taxable accounts to harvest these tax losses to offset gains. And losses can be carried forward until they are used up.*
  4. Max out your 401k, 403b (make sure you get your match) and IRA contributions.
  5. Make your donations to charity. For tax purposes, it is good strategy to donate appreciated assets and let the charity sell them so you can avoid paying capital gains tax.
  6. Spend down your Flexible Spending Account. This account generally falls into the “use it or lose it” category unless your employer allows you to rollover some of the deposits or gives you a grace period.
  7. Consider your non-charitable gifting. You can gift up to $14,000 per individual every year with no gift tax consequences.
  8. If you are on Medicare, review your supplemental and prescription drug plan to make sure they are the best plans for you. This can change from year to year.
  9. For minimizing taxes, consider bunching deductions by prepaying property taxes, investment publication subscriptions, ongoing charitable contributions, and unreimbursed employee expenses like union or professional dues.
  10. Combine your charitable intent with RMD by executing a Qualified Charitable Distribution if you are over 70.5 on the day of distribution. A Qualified Charitable Distribution (QCD) allows you to send all or part of your RMD to a qualified charity.  By doing this, the money gets to the charity and you, the IRA account owner, will not have to pay taxes on the amount donated.

While these items above have end-of-the-year deadlines, it will also be helpful to review your overall financial plan, estate planning, insurance coverages, beneficiaries and budget for the upcoming year in the fourth quarter.

*Consult with your tax professional for details.

about the author: Scott W. O'Brien CFP®

scottScott W. O’Brien CFP® is a CERTIFIED FINANCIAL PLANNER professional who serves clients by coordinating their financial lives and assisting them in making smart financial decisions within the areas of investments, retirement planning, insurance strategies, tax minimization, and estate planning.

Scott was honored as the winner of the 2015 Five Star Professional Wealth Manager for Austin, San Antonio and the Central Texas region. He has been quoted in the Wall Street Journal, US News & World Report, and Investopedia.

Learn more and/or Contact Scott

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