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Year End Financial Checklist


As the end of 2015 is quickly approaching, here is a list of actions you may want to take before the new year:

  • Take your required minimum distribution (RMD) from your IRA if you are over 70 and a half. The distribution is due by 12/31/15, and the penalty is steep.  If you don't take it, you owe the IRS 50% of the amount that should have been withdrawn.
  • Max out your retirement contributions. If you are in a 401k plan, it may be too late for this.  It can take several cycles to change the percentage deduction from your paycheck.  However, for an IRA, you can contribute up until tax day in April of 2016. The contribution limits for 2015 are $5500 per person, with a $1000 catch up provision if you are over age 55.
  • Capital gains harvesting.  You can avoid paying taxes on your capital gains in your taxable accounts if you can balance them out with capital losses.  In addition, you can offset up to $3000 of ordinary income with capital losses every year.  Any losses above $3000 in a year can be carried forward to the next tax year.
  • If you have a flexible spending account (FSA), use it up or you will lose the contribution.  
  • Give to charity.  It’s a great time of year to support your favorite charity, and get a tax deduction as well!  Make sure your charity is qualified, the IRS has a web page that lets you check on this.
  • Determine when to pay your property taxes.  Paying in November gives you the biggest discount, but many people wait until the following tax year and pay the higher amount.  Because property taxes are deductible, see if it makes sense to pay in November or December to get the added tax deduction.
  • If you have access to an Healthcare Savings Account (HSA) with a high deductible health plan, max it out.  For 2015, the contribution limits are $3,350 for singles, $6650 for a family with a $1000 catch up if you are over 55.  There is no penalty for not using an HSA in the year you contribute to it. 
  • If you plan on giving any tax free gifts, do it by 12/31/15.  You can give up to $14,000 to as many individuals as you want to in any tax year, and there are no tax consequences of those transactions.
  • Rebalance your portfolio.  If you have a target asset allocation, rebalance it annually to make sure that you stay on track.
  • Make a budget for the coming year.  Many of us operate without a budget for most of our lives, but making and sticking to a budget can help you achieve financial independence.  As part of this, make sure you have an automated savings plan in place, and that your emergency fund is at the level it needs to be.
  • If you have an old 401k, roll it over into an IRA.  It is something we always put off, but it is really easy, and we can help you do that if you come talk to us.  Give us a call at the office at 904.685.1505 and we can walk you through it!