Year-end deadline for planning

Jeanne Sullivan |

Whew…... so, this current election cycle is over and soon there will be a new administration. In the past two weeks, I find clients who are overwhelmed with the election, the barrage of 24-hours news on social media and the radio, and have a multitude of questions or concerns about what may or may not happen with the markets. Might inflation start to flare? How many my taxes change? Will volatility increase?

While I cannot predict the future, I do encourage clients to focus on those things they can control, be it ensuring getting sufficient sleep, spending time with friends and family, or proactively making positive financial decisions. We didn’t see any major tax changes in 2016 which is common in an election year.

So with this in mind, here’s a reminder for year-end planning:

  • Breathe, relax, be thankful. Repeat
  • Convert your IRA (or a portion of) to a Roth IRA.
  • Establish a solo 401(k) account for self-employed individuals wanting to defer income for the 2016 tax year. You can fund the solo 401(k) later.
  • Ensure you are maxing out your 401(k)/403(b) at work by 12/31. Max out your IRA or Roth IRA (if eligible), although you can make contributions by tax filing in 2017.
  • Take annual required minimum distributions (RMDs) from retirement plans and inherited IRAs. For those of you age 70 ½ or older with IRAs and charitable intent, the Qualified Charitable Distribution ("QCD") provision, permits transfers up to $100,000 from their IRA directly to a qualified charity and have it count as their required minimum distribution without increasing their adjusted gross income. Before you contribute to your charity be sure to evaluate your own cash flow needs and estate planning goals.
  • Make charitable donations that qualify for a tax deduction if you itemize -- yes, you can gift cash but consider gifting your highly appreciated securities. Many are taking this opportunity to truly support the causes they firmly believe in and support.
  • Gift to a non-charitable recipient, such as niece, child, grandchild. Keep in mind the gift tax limits, currently $14,000 per person per year per recipient.
  • Sell poor performing securities, if any, in your taxable portfolio to offset other gains.
  • Re-read item #1 on this list.