6 Year-End Financial TipsSubmitted by MIRUS Financial Partners on October 23rd, 2015
Yep, it’s that time of year again. Time to start thinking about 2016. Time to start thinking about your 2015 finances, and time to start planning for 2016 taxes.
While every person’s financial situation is different, you should talk with a financial professional to see if any of these tips will help put you in a better financial position in 2016.
1. Take Care of Your Charity
November and December are big months for charitable donations. If you plan to make fourth quarter donations to your favorite charities in the next few months, consider making donations using shares of appreciated stocks, mutual funds or exchange traded funds (ETFs). While you will get full credit for the market value of the donated investment on the date of the donation, you may be able to avoid capital gains taxes on the investment gains. Not every charity can handle these kinds of donations, so check with your charities first.
2. Make Sure You take Your Required Minimum Distributions (RMD’s)
Are you required to take minimum distributions from your retirement accounts, such as IRAs and 401(k)s, or are the recipient an inherited IRA, you make sure you take your distributions by Dec. 31. You may get hit will substantial penalties for any amount not taken.
3. Use All of Your Flex Spending Accounts
Most people with a flexible spending account (FSA) need to spend these dollars by year-end or they lose them. So this is a good time to get a new pair of glasses, overdue dental work or any other appointment or medical need only covered by Flexible Spending Accounts.
4. Max out Your Retirement Plan
This is a good time to check how much you have contributed to your 401(k) plan. If you’re not on track to contribute the maximum — $18,000 for people under 50 years old and $24,000 for those over 50 — there is still time to increase your salary deferral if they can afford it.
5. Get Familiar With Tax-Loss Harvesting
Tax-loss harvesting can be an excellent tactic to use in the course of normal portfolio rebalancing. This was a volatile investing year. The recent market declines may have moved some investment positions to a loss. For those of you facing a big tax year in 2016, this might be the time to sell investment properties that showed a loss. Those losses can be used to offset gains from mutual fund and ETF distributions and against other gains generated from the sale of appreciated holdings.
Before you sell holdings, check with a financial advisor to check the wash-sale rules connected with purchasing the same or similar holdings that were sold within a set timeframe.
6. Schedule a Review with Your Financial Advisor
Each person’s financial situation is different and not every tactic works for every investor. Discuss year-end financial moves with a qualified financial advisor to ensure your financial planning check list ensures you’ll be prepared for the 2016 tax season.
Mark A. Vergenes is President of MIRUS Financial partners, 110 E. King St., Lancaster; 717-509-4521 or firstname.lastname@example.org Investment Advisor Representative offering securities and advisory services offered through Cetera Advisor Networks LLC., member FINRA/SIPC. Cetera is under separate ownership from any other named entity. MIRUS Financial Partners nor Cetera Advisor Networks LLC. give tax or legal advice.