Shakespeare Blog: View from the Lake

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Year-End Financial Planning Checklist

Written ByBrian Ellenbecker, CFP®, EA, CPWA®, CIMA®, CLTC®

December Calendar

As we approach year-end, finances are on a lot of people’s minds. With a little over two weeks left in the year, there is still time to implement some last-minute planning strategies, while also starting to think about how next year might look.

There is a check list at the bottom of this page titled “What Issues Should I Consider Before the End of the Year”. Use this as a general guide to your year-end planning. Let’s review some of the most common issues from that guide you can still plan for before 2024 arrives.

Asset & Debt Issues

Do you have unrealized investment losses in your taxable account? While most indices are up on the year after the late-year rally, there could be positions that still reflect a tax loss, especially if you hold individual securities. Realizing losses is one of the most tax-efficient things you can do in your taxable investment accounts. Not only can losses offset realized gains, up to $3,000 of excess losses can be used to offset other income with the remainder able to be carried forward indefinitely.

Are you subject to taking Required Minimum Distributions (RMDs) from your retirement account? Don’t forget to take RMDs from your retirement accounts, if you haven’t yet done so. If you inherited an IRA from a non-spouse who passed away from 2020 through 2023, annual RMDs have currently been waived, although it’s possible they will be required in the future. Consult with your tax advisor or Shakespeare advisor to confirm whether or not a distribution is required for 2023, if you are uncertain.

Tax Planning Issues

Are you charitably inclined? If you plan to give to charity by the end of the year, talk to your tax advisor to ensure you do so in the most tax-beneficial way possible. Gifting appreciated securities or donating to charity directly from your IRA via a qualified charitable distribution (QCD) are two of the easiest and most tax-efficient strategies available. If you have a checkbook for your IRA and write checks to charity, those checks must be cashed by December 31, 2023 to count as a donation in 2023, which is especially important if you are using this to satisfy your 2023 RMD.

Will you be receiving any significant windfalls that could impact your tax liability? If you have received or expect to receive significant income from an employer bonus, employer equity awards like stock options or RSUs, you sold a piece of real estate or other property for a large gain, etc., you may need to pay additional tax during the year to avoid an underpayment penalty. You avoid an underpayment penalty if you pay 90% of your current year’s liability or 100% of your prior year’s liability (110% if last year’s AGI was over $150,000). Consider making a quarterly payment or increasing your withholding to pay any additional tax that might be owed. Consult with your tax advisor to ensure your payments are timed properly.

Cash Flow Issues

Are you able to save more? If you haven’t done so, consider maximizing your retirement account contributions, or at least contributing as much as you’re able to from a cash flow standpoint. If you contribute to a pre-tax employer plan or IRA, the contributions typically reduce your income. If you contribute to a Roth, you don’t get a tax deduction, but the assets grow tax free. If you’re eligible to make a health savings account (HSA) contribution, consider doing so. It’s the only account with a triple tax benefit – deductible contributions, tax-deferred growth, and tax-free withdrawals if used for qualified medical expenses. To be eligible, your health insurance plan must be a qualified high deductible health plan (HDHP).

Do you want to contribute to a 529 account? If you’re saving for college expenses, consider funding a 529 plan. Contributions may be deductible at the state level depending on your state’s rules. Account growth is tax-deferred and withdrawals are tax-free if used for qualified education expenses. For most states, the deadline to contribute to a 529 is December 31 to get the tax deduction, if one is available.  For Wisconsin residents contributing to Edvest, the deadline to make a deductible contribution for 2023 is April 15, 2024. However, if you want to use the 2023 annual exclusion gift limit of $17,000, the contribution must be completed by December 31, 2023.

For more year-end planning ideas, watch Brian Ellenbecker’s 2023 Year-End Tax & Financial Planning Webinar below:


If you have any questions related to our personal situation, reach out to your Shakespeare Financial Advisor.


End of Year