Planning your year-end tax documents early can save time, reduce stress, and help you maximize deductions or credits you might otherwise miss. Use the below checklist to create a clear financial picture that can be used to make informed decisions before tax deadlines approach.
Year-End Planning Check List
- Required Minimum Distribution: If required, remember to complete your RMD from your IRA.
- Charitable Gifts (QCD): If over 70 ½, consider making charitable gifts through a qualified charitable distribution.
- Charitable Gifts (Appreciated Stock): Consider making charitable gifts by donating appreciated stock.
- Gifting to Family: Gift up to $18,000 to family members, or $36,000 if married and both spouses are willing to gift-split.
- Roth Conversion: Consider converting all or a portion of your traditional IRA to a Roth IRA. This can be especially effective if taxable income is lower than anticipated for the year, and if higher taxes are anticipated in the future.
- Contributing to an IRA or 401(k): If taxable income is higher than expected, consider making contributions to a traditional IRA.
- Tax Loss Harvesting: If you have realized gains in the current year, or if you anticipate having realized gains in upcoming years, consider selling securities that are at a loss to offset current or future gains, (and/or up to $3,000 in ordinary income). Ensure that the same or a substantially identical security is not purchased within 30 days before or after the loss sale.
Please remember to consult a qualified CPA or attorney before making any legal or tax decisions.