2019 End-of-Year Financial To-Do’s

to-do-list

Please note the publish date of this blog. Financial information, market conditions, and other data mentioned in this post may no longer be accurate or relevant.

With the winter holidays just around the corner, the window for making some last-minute tax-saving moves is dwindling. Here are some of my favorite December strategies for managing your tax burden and taking advantage of some underused financial opportunities.

Five Last-Minute Tax-Saving Moves

Max Out 401(k)s

If you are enrolled in a workplace 401(k), you have until the end of the year to max out your contributions. Limits this year are $19,000 per person or $25,000 if you are over 50. For those in high tax brackets, and especially those living in high tax states like California, the tax savings from these contributions can be very valuable. If you are self-employed, you have the option to set up and contribute to your own 401(k) [called a Solo 401(k)], but you must do so before the end of the year, even if you don’t fund it until tax time.

Finish Gifting to Loved Ones

In 2029, you can gift $15,000 to any individual in a given year without having to file a gift tax return. If you make regular gifts to a child or other loved one, make sure to sign that check before December 31. Come 2020, you have another $15,000 that you will be able to gift.

Think Charitably

If you are in a rush to make charitable contributions before the end of the year, you may want to consider funding a donor-advised fund (DAF) instead. A DAF is a type of account that allows you to realize a charitable contribution in the year you fund it rather than when you direct your gift to a charity. Realize the tax savings now while giving yourself a little extra time to pick the charities that you want to support.

Consider a Roth Conversion

Expecting a low tax year? This may be a year to consider converting some of your traditional IRA money to a Roth. You may pay some tax on the amount that you convert, but depending on your retirement time horizon and goals, a Roth may be a better vehicle for you in the long term. You will never pay taxes again on a Roth, and you also avoid any required minimum distributions, something that is unavoidable with a traditional IRA.

Take Losses

Though most of your stock and bond positions may be in a gain position, there may be some that have losses that you can take to offset some capital gains for the 2019 year.

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Disclosure

Abacus Wealth Partners, LLC is an SEC registered investment adviser. SEC registration does not constitute an endorsement of Abacus Wealth Partners, LLC by the SEC nor does it indicate that Abacus Wealth Partners, LLC has attained a particular level of skill or ability. This material prepared by Abacus Wealth Partners, LLC is for informational purposes only and is accurate as of the date it was prepared. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Advisory services are only offered to clients or prospective clients where Abacus Wealth Partners, LLC and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Abacus Wealth Partners, LLC unless a client service agreement is in place. This material is not intended to serve as personalized tax, legal, and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Abacus Wealth Partners, LLC is not an accounting or legal firm. Please consult with your tax and/or legal professional regarding your specific tax and/or legal situation when determining if any of the mentioned strategies are right for you.

Please Note: Abacus does not make any representations or warranties as to the accuracy, timeliness, suitability, and completeness, or relevance of any information prepared by an unaffiliated third party, whether linked to Abacus’ website or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

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