While keeping in mind your long-term investment goals, meet with your advisor and coordinate with your tax professional to examine nuances and changes that could impact your typical year-end planning.
Be thoughtful about required minimum distributions (RMDs) to ensure that you comply with the rules. When you reach age 70½, you are required to take a required minimum distribution (RMD) by December 31 each year. Take your 2019 RMD to avoid a 50% penalty on required amounts not taken. Other considerations:
Evaluate whether you could benefit from tax-loss harvesting – selling a losing investment to offset gains. The first $3,000 (single or married filing jointly) offsets ordinary income. Excess losses also can be carried forward to future years. With your advisor, examine the following subtleties when aiming to decrease your tax bill:
Those at or near the next tax bracket should pay close attention to anything that might bump them up and plan to reduce taxable income before the end of the year.
From welcoming a new family member to moving to a new state, any number of life changes may have impacted your circumstances over the past year. Bring your financial advisor up to speed on major life changes and ask how they could affect your year-end planning.
Consider these to-dos as you prepare to make the most of year-end financial moves, and discuss with your financial advisor and tax professional:
* Withdrawals prior to age 59½ may also be subject to a 10% federal penalty tax. RMDs are generally subject to federal income tax and may be subject to state taxes. Consult your tax advisor to assess your situation. Raymond James advisors do not provide tax advice.
Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through McGee Wealth Management, Inc. McGee Wealth Management, Inc. is not a registered broker/dealer, and is independent of Raymond James Financial Services.
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