5 Key Financial Planning Considerations Before Year-End - Republic Wealth Advisors
Investments, Strategies & Tips, Taxes

5 Key Financial Planning Considerations Before Year-End

5 Financial Planning Topics You Should Consider Before Year-End.

Life coaches often say that the best New Year’s resolutions are those that everyone can start before January 1. Planners and doers may want to consider putting their finances in order to start off the new year on the right financial foot.

Here are five important areas for your consideration before year-end:

1. Required minimum distribution

It is typically mandatory to start withdrawing a required minimum distribution from 401(k)s or traditional IRAs once a person turns 70 ½. This minimum distribution varies depending on the person’s age, his or her spouse’s age, and the balance in his or her retirement accounts.

The distribution must be withdrawn before December 31st each year, but those who have turned 70 ½ this year have until April 1st.

It’s vital the right amount is taken in a timely fashion. If not, the tax penalties are severe. Individuals who fail to withdraw their distributions will be taxed 50 percent of the minimum amount they should have taken out of their retirement accounts.

2. Charitable gifting

Money and items donated to charity are tax-deductible as long as the donations have been made to a qualified charity. The IRS has an online database that lists which charities qualify for this.

Instead of donating cash, consider gifting appreciated securities or funding a Donor Advised Fund (see our blog post on the topic). These alternative gifting approaches can provide significant tax benefits.

Note that any gift worth more than $250 requires a written receipt from the charity.

3. Tax planning

It’s never too early to start planning one’s taxes. If you’re a business owner, think about paying bills and making investments before the end of the year so you can deduct more. Also, consider waiting until January 1 to invoice some customers if it might keep you in a lower tax bracket for 2017.

For taxable investment accounts, it may be wise to explore realizing capital losses to offset capital gains.

With new tax legislation on the table in Congress, year-end tax planning in 2017 may prove especially difficult. As always, we recommend you consult with your financial advisor and CPA to determine if any year-end actions should be taken

4. Gifts to family members

Consider tax-free gifting up to $14,000 per person before year-end ($28,000 maximum if married or $56,000 maximum if married and giving to a married couple). Staying at or below this threshold will ensure gift tax is avoided. As such, taxpayers should consider waiting until the new tax year to make new gifts if they have already reached this limit.

Keep in mind that any gift made directly to an educational or medical institution to cover a relative’s expenses isn’t subject to the gift tax.

5. Roth conversion

Using a Roth IRA to save up for retirement allows the money to grow tax-free (as compared to tax-deferred in a Traditional IRA). Money can be contributed directly into a Roth IRA only for those individuals with income levels below certain thresholds.

However, these restrictions do not apply to Roth conversions, which move money from a Traditional IRA to a Roth IRA. There is no limit on how much you can convert. However, remember that ordinary income taxes are owed on the amount of the conversion.


We hope you will consider the areas mentioned above as you plan for year-end. If we can offer additional information on any of the topics, please contact us directly. We strongly encourage you to contact your financial advisor, CPA, and other trusted advisors to better prepare your year-end financial plan.



IMPORTANT DISCLOSURE INFORMATION: Please remember that 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 Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog 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 blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice. If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, 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. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

Related Posts