As we head into the final weeks of the year, it’s a great time to pause, look over your financial picture, and make sure you’re not leaving opportunities, or IRS penalties, on the table. Here are a few simple but important year-end planning items to review.
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If you’re subject to Required Minimum Distributions, whether from your own IRA/401(k) or an inherited retirement account—double-check that everything has been withdrawn. The IRS can impose a 25% penalty on any amount not taken, so it’s worth making sure the total is accurate and processed correctly.
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Many investors unknowingly hold high-income-producing mutual funds or ETFs in their taxable brokerage accounts. Toward the end of the year, these funds often distribute capital gains and dividends that can create avoidable tax bills. Reviewing where your investments “live” (taxable vs. tax-advantaged accounts) can help reduce that burden going forward.
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If you itemize deductions, now is the time to consider gifts of cash, appreciated stock, or household items. Donating appreciated securities can be especially powerful—you avoid capital gains tax and receive a deduction for the full fair market value.
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Taxpayers with taxable income under $48,350 (Single) or $96,700 (Married Filing Jointly) may qualify for the 0% long-term capital gains rate. That means you could sell appreciated positions in your taxable accounts and pay nothing in federal tax. It’s a valuable strategy for retirees, part-time workers, or anyone experiencing a lower-income year.
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One often overlooked year-end item is making sure you’re on track with tax withholding or quarterly estimated payments. Small adjustments now can help you avoid underpayment penalties or surprise tax bills in April.
If you want help walking through any of these steps or tailoring them to your situation, feel free to reach out to Integra Wealth, fee-only financial advisors in Cary, NC and Chattanooga, TN. This is a great time of year to get organized and set yourself up for a strong start to next year.
As we head into the final weeks of the year, it’s a great time to pause, look over your financial picture, and make sure you’re not leaving opportunities, or IRS penalties, on the table. Here are a few simple but important year-end planning items to review.
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