As the year draws to a close, there a few things to think through from a tax and investment standpoint to ensure efficiency and maximize benefits. We do recommend meeting with your tax planner to gauge if any new opportunities exist due to a change in circumstances or tax law. From the investment side, we’re happy to discuss what can be done to improve your year-end strategy in regards to capital gains, qualified plan contributions, charitable donations, etc.
See below for ideas to keep top of mind and act on before the end of the year:
- Maximize contributions: Review YTD contributions for your 401(k) or other qualified plan. This will help defer income and should reduce your tax burden.
- Tax loss harvesting: If you have losses in positions and want to offset gains – now would be a good time to look into that. We review our portfolios for these opportunities on a consistent basis.
- Analyze Required Minimum Distributions: The primary topic of last week’s article explained options for your RMDs.
- Charitable Contributions: You can donate cash or securities to give to a non-profit organization of your choice. Some people may use a Donor-Advised Fund to accelerate donations if 2021 will bring a large tax liability.
- 529 Contributions: Some states allow for a small deduction for contributions that aren’t necessarily intended for your child. Some laws permit you to take deductions on contributions per beneficiary.
- Roth Conversion: If you anticipate your future tax rates will be materially higher than projected for 2021, converting a piece of your IRA to a Roth may be a good idea.
Be on the lookout for an article with more insight into charitable contributions in the coming weeks. Please reach out to us if you need help thinking through these items.
Matt and Andrew