With Christmas upon us and the New Year’s around the corner, it’s the perfect time to review your finances to maximize the efficiency of your resources. These tips are not one-size-fits-all; what works best depends on your situation. Before taking any action on any of these, be sure to consult a tax professional to ensure these strategies align with your goals.
Here are 5 financial planning ideas to consider before year-end:
- Required Minimum Distributions (RMDs)
- If you’re of RMD age or a non-spousal IRA beneficiary, confirm the required withdrawal amount and deadlines to avoid penalties. A little planning can make a big difference in your financial outlook.
- Charitable Giving
- Beyond cash donations, explore opportunities like employer gift matching, donating appreciated securities, or making Qualified Charitable Distributions (QCDs) if you’re over 70½. QCDs can satisfy RMDs while lowering taxable income.
- Flexible Spending Accounts (FSAs)
- Don’t let your hard-earned funds go to waste! Use any remaining FSA funds before the deadline, or check if your plan allows carryovers.
- College Planning
- Maximize 529 plan contributions to take advantage of state tax benefits. Grandparents and other family members may also consider gifting to 529s as part of their estate planning strategy.
- Gifting Strategies
- The annual gift tax exclusion allows you to gift up to $17,000 per person in 2024 without triggering gift taxes. This can be a tax-efficient way to support loved ones.
Bonus: Meet with Your Financial Professional
Now is an ideal time to review your financial plan, reflect on your goals, and make adjustments for the year ahead. A tax professional can also provide tailored advice to ensure these strategies align with your needs.
Take the Next Step
If any of these ideas resonate with you but you’re unsure where to start, we’re here to help. Contact us today to schedule a complimentary consultation and begin the New Year with a clear financial plan.
Wishing you Merry Christmas and a prosperous New Year!