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2021 Year-End Planning Checklist

2021 Year-End Planning Checklist

| November 29, 2021

Look at this list and check it twice.  Before you know it, the giant crystal ball will be dropping in Times Square and 2021 will be no more. Before we turn the calendar to a new year, it is critical to review these year-end financial planning best practices and act on the ones appropriate for your situation while there is still time. 

  1. Check your Flexible Spending Account balance. If your employer plan does not allow you to roll any balances over into the next year, make sure you spend the money on qualified expenses so you don’t lose out.
  2. Maximize your 401(k), 403(b), or 457 employer retirement plan or, at a minimum, contribute enough to take full advantage of your employer’s match.
  3. Maximize your traditional IRA or Roth IRA contributions to enable you to save more for your retirement.
  4. If you are considering a Roth conversion, the deadline to execute it for the 2021 calendar year is December 31st.
  5. Take your Required Minimum Distribution (RMD) before year-end to avoid penalties and taxes.
  6. Don’t forget to make charitable contributions before the end of the year. There are a lot of organizations doing very needed work and, even if you take the standard deduction, you can deduct up to $600 for cash contributions to charity.
  7. Consider donating all or part of your RMD to charity to support causes you care about while reducing your taxable income.
  8. Review your beneficiary designations, especially if you have had changes in your family like a new child or grandchild.
  9. Take advantage of the annual gift tax exclusion of $15,000 (in money and/or property) per recipient before year end.
  10. If you or your spouse participate in a high deductible health plan, you can still fund your HSA by check before the end of the year if you are not currently on pace for hitting the annual contribution limit ($7,200).
  11. Consider selling some underperforming mutual funds prior to any expected taxable distribution to minimize unrealized gains and/or selling some investments that have lost value in order to offset some or all of the gains on appreciated assets you have sold throughout the year.

This may seem like quite the “to-do” list, which is why Team SKG is at the ready to help you take the right actions for your personal situation and to put you in a strong position for 2022.

Representatives do not provide tax and/or legal advice. Any discussion of taxes is for general informational purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax or accounting advice. Clients should confer with their qualified legal, tax and accounting advisors as appropriate.