top of page
  • Writer's pictureMichael Schreiber

10 Things to Put on Your Year-End Checklist

In a year that has thrown us a pandemic and a global recession, 2020 has reminded us of the importance of financial preparation. With year-end approaching, it’s an important time to revisit your financials to maximize your savings, ensure you start the new year strong, and stay on track to accomplish your goals.

✔︎ Schedule a Financial Planning Meeting with Aevitas Wealth Management

✔︎ Tax-loss Harvesting

✔︎ Maximize Retirement Contributions

✔︎ Fund Individual Retirement Accounts (Traditional, Roth, Rollover, & SIMPLE)

✔︎ Gift Securities or Cash to a Loved One

✔︎ Open a Donor Advised Fund

✔︎ Contribute to a 529 College Savings Account

✔︎ Fund Health Savings Accounts and Spend Flexible Spending Accounts

✔︎ Assess Estate Planning Documents

✔︎ Assess Estate Planning Documents

Tax-Loss Harvesting

We are always seeking opportunities to harvest losses in your non-retirement accounts by offsetting any realized capital gains. If you have a loss carryforward or significant gains or losses from investments outside of our management, please let us know. You can also use $3,000 in capital losses to offset up to $3,000 of regular income each year.

Maximize Retirement Contributions

The maximum employee contribution for workplace retirement plans increased in 2020 to $19,500 ($26,000 if you are 50+ years old). Depending on your earned income, you can also contribute up to a maximum $6,000 ($7,000 if you are 50+) into an IRA. Additionally, the SECURE Act enacted last year made a few changes to retirement plans. Individuals over the age of 70 ½ are no longer restricted from making an IRA contribution with earned income. Self-employed individuals also have up to the tax filing deadline to establish a Solo 401(k); originally a December 31st deadline.

  • Maximize contributions to your workplace retirement plans.

  • Fund your IRAs before the tax filing deadline.

  • Self-employed individuals interested in establishing a Solo 401(k), contact us.

Annual Gifts

If you plan on using your annual gift exclusion to make a gift to a loved one, the 2020 annual exclusion is $15,000 per person. If you are married, you and your spouse are each entitled to the $15,000, so you can gift $30,000 to an individual without filing a gift tax return.

  • Make sure to complete any gifts before the end of the year.

  • If you have loved ones for whom you would like to open a 529 college savings account, please contact our office.

Charitable Contributions

The Coronavirus Aid, Relief, and Economic Security (CARES Act) included new provisions to encourage charitable giving this year. For those individuals who do not itemize and take the standard deduction, the new law allows an “above the line” charitable income tax deduction equal to the amount of charitable cash gifts up to $300 per individual. Even more noteworthy, the CARES Act increases the available deductions on qualified charitable cash contributions to 100% of Adjusted Gross Income (up from 60%) for the 2020 tax-year. This provision does not apply to contributions to a donor-advised fund, but you are still able to deduct up to 60% of AGI for cash gifts and up to 30% for appreciated assets contributed to a donor-advised fund.

Health Savings Accounts (HSAs) & Flexible Spending Accounts (FSAs)

If you have a High Deductible Health Plan, you may be able to open a Health Savings Account (HSA) individually or with your employer. Account owners can contribute up to $3,550 for individual coverage and $7,100 for family coverage. Since you are not required to withdraw your funds by year-end, HSAs are an excellent opportunity to build savings for qualified medical expenses in retirement and are a tax-friendly safeguard. You may also have funds in a Flexible Spending Account (FSA) offered by your employer. Unlike HSAs, you will be required to spend your FSA before year-end. Check with your employer to see if your FSA has a carryover option or grace period.

  • Contribute to your HSA before the tax filing deadline.

  • Spend the funds in your FSA.

Required Minimum Distribution (RMD) Waiver

The CARES Act has waived 2020 Required Minimum Distributions. We have been in contact with all clients who are normally subject to distributions to ensure that their living expenses are covered. For clients that have skipped their RMD this year, contact us if you need additional distributions to meet your living expenses.

Goal Planning: 2021 and Beyond

It's not too early to start thinking about 2021. There may be financial goals that you hoped to achieve this year that Aevitas Wealth can still help you accomplish. Perhaps you had intended to open a 529 college savings account, increase your emergency fund, or decide when retirement will be possible. Together we can create a personalized roadmap to reach your goals, large and small. We will evaluate your savings, debt, and spending and build a customized cash flow analysis. Schedule a time with us to discuss your future and learn why a financial plan should be part of it.

87 views0 comments

Recent Posts

See All
bottom of page