As you prepare for the holidays, remember to carve out time to focus on your year-end personal financial affairs.
Start the process soon.
There’s a lot to do and a lot to track. To help you through it, Eddy & Schein Group is providing you with a To-Do List.
Start by asking your accountant, your financial advisor, and your attorney to provide each of the others with your relevant information. Follow these steps to ensure all your professionals have what they need from you to do so.
Your Financial Advisor – Investments
Retirement Accounts
- Confirm that all IRA Required Minimum Distributions (RMDs) are completed
- If you’ll distribute RMDs via a Qualified Charitable Donation mechanism, be sure they are completed well before the end of the year
- Convert some or all of your traditional IRA to a ROTH IRA
- Maximize retirement contributions
Brokerage Accounts
Discuss with your advisor:
- The potential benefit of selling investments with capital losses to offset significant capital gains.
- If your accounts should be rebalanced per your investment plan.
Your Attorney – Estate Planning
Discuss with your attorney:
- Revisions you would like to implement, perhaps due to family changes
- Recommendations in light of tax law changes
Your Accountant – Income & Tax Management
Discuss with your accountant:
- Managing the variable portion of your income for efficiency, not only with tax brackets but also for Income-Related Monthly Adjustment Amount (IRMAA).
- Making January’s mortgage payment in December for the bigger 2024 deduction
Flexible Spending Accounts
- Check your account balance and identify any eligible expenses
- Deplete your account if the funds must be used within the plan year
Gifting
Consult your accountant about gift taxes and annual exclusions:
- Gifts to individuals: One person may gift up to $18,000 per recipient, and a couple may gift up to $36,000 per recipient
- Gifts to service providers, house staff, and building staff, such as year-end tips or bonuses
- Gifts to charitable organizations and whether gifts should be cash or appreciated assets, such as stocks
Tax Prep
Gather records for:
- Acknowledgments of charitable contributions over $250
- Documentation for medical expenses, including transportation, if you meet the deduction threshold of 7.5% of adjusted gross income
Get started wrapping up your year-end personal financial affairs so that you’re not overwhelmed at the end of December. Contact your advisors and get on their calendars. Ask what information they need and from whom so you are ready for a discussion.