The 2019 End of the Year Checklist
By Nicole Polanco
December 26, 2019
Estimated Reading Time: 2 minutes
The 2019 End-of-the-Year Checklist
2020 is right around the corner!
Before you toast your champagne with friends and welcome in the new year, these couple of days are especially good for organizing your finances. By taking a quick look at your portfolio, taxes, and your financial plan, you can save yourself a headache in the new year.
Below is a checklist (or a list of important items for you to review) to help you focus on some familiar areas of your wealth and some less-common items that can take your financial organization to the next level.
Taxes
- If you have p,ositions with sizeable losses for 2019, it could create an opportunity for tax-loss harvesting to offset taxes on both gains and income. Sell positions at a loss to offset your capital gains.
- Up to $3,000 of losses can be carried forward each year to lower taxable income.
RMDs
- If you're over the age of 70.5, make sure your RMD is taken for the year – distributions can be aggregated amongst multiple IRAs.
- Inherited IRA RMDs are separate from Traditional IRA RMDs and cannot be combined.
Charitable Giving
- Ask your advisor about Donor Advised Funds (DAF)! Collectively funding the account with few years’ worth of donations results in an immediate income tax deduction in the year you contribute to a DAF.
- If you choose to donate stock to a charity or church, make sure it is a long-term position with large gains.
Gifting
- As a reminder, the maximum gift amount limits are $15,000 per person ($30,000 if electing gift splitting with spouse) without having to complete Form 709 form (gift tax return).
- 529s (college savings accounts) may be front-loaded for 5 years for a total of $75,000 or $150,000 if gifting jointly.
IRA Contributions
- 2019 & 2020 limits are $6,000 with a $1,000 catch-up if you are over 50 years old.
- The same contribution limits apply to a Roth IRA, however, your MAGI must be:
- Less than $122,000 filing single or $193,000 married filing jointly
- Less than $124,000 filing single or $196,000 married filing jointly
- If you are over the thresholds above, a back-door Roth is an option if wanting to contribute to a Roth IRA.
Roth Conversions
- A Roth conversion can be advantageous under the following circumstances:
- You want to maximize your estate
- Your tax bracket will be higher in the future
Estate Planning
- Ensure your will, trust documents and any other estate planning documents are up to date with copies stored in a secure place.
Education Planning
- Consider using excess cash to fund a 529.
- Reminder that retirement funds are not counted towards financial aid calculations.
If you have any questions, or would like to talk to a financial advisor about any of the above items, please reach out to our team, and an advisor will be happy to help you!
Here's to a great year ahead in 2020.
Nicole Polanco is an Associate Advisor at Chicago Partners. Nicole helps clients plan for and optimize their wealth during their career and their retirement.
Important Disclosure Information
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Chicago Partners Investment Group LLC (“CP”), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CP. Please remember to contact CP, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CP is neither a law firm nor a certified public accounting firm and no portion of the commentary content should be construed as legal or accounting advice. A copy of the CP’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.
December 26, 2019
Estimated Reading Time: 2 minutes
The 2019 End-of-the-Year Checklist
2020 is right around the corner!
Before you toast your champagne with friends and welcome in the new year, these couple of days are especially good for organizing your finances. By taking a quick look at your portfolio, taxes, and your financial plan, you can save yourself a headache in the new year.
Below is a checklist (or a list of important items for you to review) to help you focus on some familiar areas of your wealth and some less-common items that can take your financial organization to the next level.
Taxes
- If you have p,ositions with sizeable losses for 2019, it could create an opportunity for tax-loss harvesting to offset taxes on both gains and income. Sell positions at a loss to offset your capital gains.
- Up to $3,000 of losses can be carried forward each year to lower taxable income.
RMDs
- If you're over the age of 70.5, make sure your RMD is taken for the year – distributions can be aggregated amongst multiple IRAs.
- Inherited IRA RMDs are separate from Traditional IRA RMDs and cannot be combined.
Charitable Giving
- Ask your advisor about Donor Advised Funds (DAF)! Collectively funding the account with few years’ worth of donations results in an immediate income tax deduction in the year you contribute to a DAF.
- If choosing to donate stock to a charity or church, make sure it is a long-term position with large gains.
Gifting
- As a reminder, the maximum gift amount limits are $15,000 per person ($30,000 if electing gift splitting with spouse) without having to complete Form 709 form (gift tax return).
- 529s (college savings accounts) may be front-loaded for 5 years for a total of $75,000 or $150,000 if gifting jointly.
IRA Contributions
- 2019 & 2020 limits are $6,000 with a $1,000 catch-up if you are over 50 years old.
- The same contribution limits apply to a Roth IRA, however, your MAGI must be:
- Less than $122,000 filing single or $193,000 married filing jointly
- Less than $124,000 filing single or $196,000 married filing jointly
- If you are over the thresholds above, a back-door Roth is an option if wanting to contribute to a Roth IRA.
Roth Conversions
- A Roth conversion can be advantageous under the following circumstances:
- You want to maximize your estate
- Your tax bracket will be higher in the future
Estate Planning
- Ensure your will, trust documents and any other estate planning documents are up to date with copies stored in a secure place.
Education Planning
- Consider using excess cash to fund a 529.
- Reminder that retirement funds are not counted towards financial aid calculations.
If you have any questions, or would like to talk to a financial advisor about any of the above items, please reach out to our team, and an advisor will be happy to help you!
Here's to a great year ahead in 2020.
Nicole Polanco is an Associate Advisor at Chicago Partners. Nicole helps clients plan for and optimize their wealth during their career and their retirement.
Important Disclosure Information
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Chicago Partners Investment Group LLC (“CP”), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CP. Please remember to contact CP, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CP is neither a law firm nor a certified public accounting firm and no portion of the commentary content should be construed as legal or accounting advice. A copy of the CP’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.