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Year-End Financial Checklist


When you’re making your list and checking it twice, don’t forget to review the following items to ring in the new year with peace of mind.

Income Taxes

  • Review your tax withholdings

Have you had a major life change (employment change, marriage/divorce, a new chi­­ld) that affects your income tax? Check to make sure your tax withholdings have been properly adjusted. Having low withholdings can lead to tax penalties, while having too high of withholdings prevents you from accessing your money until your tax return is filed.

  • Estimate your AGI

Determine your adjusted gross income either on your own or with the help of your tax preparer. Your AGI will help determine your tax bracket, which you’ll need for investment and retirement planning. It is also the baseline for understanding how additional last-minute deductions can decrease your income tax liability.


  • Consider “locking-in” losses on investments to help diminish taxes on capital gains

If your losses exceed your gains for this year, you can use the losses to reduce up to $3,000 of taxable income. If your total losses surpass $3,000, you can roll over excess losses to offset gains in another year. If you have losses from a previous year, calculate how they affect either gains or losses from this year.

  • Check to make sure you didn’t make (or plan on making) any “wash sales”

A wash sale is the sale of an asset followed by a repurchase of a similar asset within 30 days. The IRS does not allow capital losses on wash sales; if you have already made a wash sale, do not plan on the capital losses being available for tax use this year.

  • Check to see when you last rebalanced your portfolio.

Although you don’t need to update your investments every year, many people go far too long without making necessary adjustments. Be sure to consult a financial professional to understand the tax implications of rebalancing.

Retirement Accounts

  • If you are retired, make sure you’ve taken all necessary required minimum distributions (RMDs)

RMDs may be one of the most important items to review when going over your finances at the end of the year. Standard IRAs require these distributions be taken annually after the year you turn 70 ½; standard 401(k)s require them annually after you retire or turn 70 ½ (whichever is earlier). Failure to take an RMD will trigger a 50 percent excise tax on the value of the RMD.

  • Max contributions to an IRA and employer retirement plan for the year

Both IRAs and 401(k)s have annual contribution limits. If you find you have excess savings and have not reached your annual limit, it may be a good idea to make additional contributions. Similarly, you may also consider making greater monthly contributions to your accounts next year, spreading out the cost of contribution. The deadline for IRA contributions is usually April 15 of the following year; 401(k) deadlines may be restricted to the calendar year, depending on your employer.

  • Consider converting a traditional IRA to a Roth IRA

Did you have a good tax year? It may be an opportune time to convert a portion (or all) of your traditional IRA to a Roth IRA and pay your taxes at a lower rate. It is important to understand, however, that Roth accounts have contribution limits placed on them, so keeping a traditional IRA might be beneficial. Before making any changes, consider seeking the help of a financial professional who can help you with the conversion and calculate your new tax liability.


  • Donate to charity as a way to reduce taxes

You can lower taxable income by 50 or 30 percent with a gift to a public charity or by 30 or 20 percent with a gift to a private foundation. If your gift exceeds these limits, you can roll over the excess deduction for up to five years.

  • Reduce your estate through gifts

You are permitted to give up to $14,000 a year per recipient as an untaxed gift. Gifts above this value will consume part of your lifetime gift/estate tax exemption amount. If a gift directly funds education tuition or pays for qualified medical expenses, it will go untaxed no matter what the value.

Family Funding

  • Check your flexible savings account (FSA)

The government only permits a $500 annual rollover in an FSA; any excess funds disappear if unused by the end of the year. If you have extra money in your FSA, you may want to schedule necessary medical or dental procedures before the end of the year.

  • Check your health savings account (HSA)

HSA funds don’t disappear at the end of each year like with an FSA; however, many with few medical needs discover money accumulating in their HSAs much faster than they are using it. Consider reducing your contributions to your HSA if your account has reached a comfortable amount and you know of better uses for your money.

  • Consider contributions to a 529 plan to fund your children’s/grandchildren’s education

529 Plans allow for you to make contributions, which are tax-free as long as you use them to pay for qualifying secondary education expenses.

If you have questions about how best to get your finances in order for next year, never hesitate to reach out to us at: (215) 709-5100 or

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