The end of the year is always a busy time, and it can feel overwhelming to think about adding more to your to-do list. However, checking on your financial wellness is something you should never put off. That’s why our friends at New York Life have provided us with a guide to help with end-of-year financial planning.
As the year comes to a close and a new one begins, it’s an excellent time to reflect on:
Where you are personally and financially,
Where you want to be by the end of this year, and
What needs to be done to achieve your goals.
If you’re feeling uncertain about these questions, you’re not alone. Many people find that starting with an initial discussion to get their “thoughts down on paper” helps kick-start the process of setting goals. From there, they can map out actionable steps to achieve their personal financial objectives.
Take a moment to review the areas below and consider whether you can answer them confidently. If not, when might be a good time in your schedule to discuss actions that could benefit you?
Income Tax
Are you on schedule to reserve sufficient withholding (W-4) and quarterly payments to the IRS to meet your income tax liability for this year?
Have there been unusual income items?
How might the Alternative Minimum Tax (AMT) apply to you this year?
To lower your tax liability, consider:
Accelerating payment of real estate or other taxes
Making additional charitable donations
Deferring income where possible
Would deduction "bunching" save you significant taxes?
What actions have you taken to manage your income and capital gains marginal taxation?
If you trade stocks, have you taken steps to avoid the "wash sale" rules?
Savings and Investment
Have you maximized deductions to your qualified plans or IRAs, including any available “catch-up” contributions?
Is your retirement income tax-diversified?
Do you have assets that generate tax-free income, such as a Roth IRA or 401(k)?
Do you own assets (e.g., cash value life insurance) that allow access to their values tax-free?
If you have a larger income this year, should you consider selling certain investments for “loss harvesting”?
Are you systematically rebalancing your portfolio?
How is your cash allocation?
Retirement
Are you maximizing company qualified plan or 401(k) matches?
Is a Roth option available to you, and have you considered allocating to it?
What IRA options are available, and have you taken advantage of them?
Do you have a plan for timing your Social Security benefits upon retirement?
Have you created a "bucket list" for your retirement goals, such as travel and activities when you reduce working hours or retire?
Family Protection Review
What are your plans for family financial security if you are unable to work?
What role could Social Security play for your family in case of death or disability?
Does a 529 Plan for education funding fit your family’s needs? Are you fully funding it?
Are you funding a Roth account for a child with employment income?
Have you confirmed beneficiary designations for all financial accounts and insurance?
Healthcare
How does your current medical insurance cover routine and emergency matters for your family?
What is your plan for personal care in retirement?
Are there special needs family members you are responsible for?
Do you have written plans, including trusts, to coordinate their care with potential government benefits?
Have you utilized Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs) available to you?
If you cannot work but are unable to retire, do you have personal insurance or work coverage to maintain income flow?
Are you deducting premiums for income protection coverage where possible?
Legacy Planning
Are your essential estate planning documents (Will, Living Trust, Powers of Attorney, Healthcare Directives, Living Will) up to date within the last 5–10 years?
Have there been life events (e.g., marriage, children, grandchildren) that require amendments?
Are you consistently making annual gifts to benefit family members?
When did you last review the total value of your assets in terms of tax exposure?
Is this a good time to draft or review a Mission Statement to share with family members?
Business
How efficient is your business’s qualified retirement plan in funding your retirement?
Is the plan design performing as expected? Is now the right time to review funding allocations?
Can you defer income/revenue to next year (depending on your accounting method)?
Are there expenses you could accelerate to reduce taxes this year?
Is your accountant utilizing available tax credits, such as:
Qualified Business Income (QBI) credit
Employee Retention Credit
Paycheck Protection Loan programs
Are you taking full advantage of:
60% Bonus Depreciation
Section 179 deduction for business equipment and vehicles?
Are you aware of the tax benefits of employing family members in the business?
When was the last time you reviewed your business structure with your accountant?
Should your business be organized as a C Corporation, S Corporation, Partnership, or LLC for tax flexibility and benefits?
Should you consider multiple corporate entities for asset protection and tax flexibility?
Note: This material includes tax-related topics for informational purposes. It is not intended for avoiding IRS penalties. Always seek advice from your independent tax, legal, or accounting professionals before making decisions or implementing strategies.
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