Year End Checklist

Checklist - Puckett and Sturgill Financial Group

Review Investments and Tax Time Strategy

As you look ahead, you want to ensure that your investments and tax strategy are in order so that you can reap the benefits of your hard financial work over the past year. Changes made before the end of the year can impact your final numbers when it comes time to file your taxes, so pay close attention to the details as you work through each of your investments. Here are some practical steps you can take:

Consider ways to offset capital gains

Review potential tax loss harvest opportunities (assets that have declined in value during the year)

Be mindful of wash sale penalties – wait for at least 31 days to buy back sold holdings for a loss
Look for ways to offset capital gains elsewhere in your portfolio or ordinary income (up to $3,000 per year)


Purchasing mutual fund shares in nonqualified accounts before year end may mean paying capital gains taxes on brand new investments
Are you selling your primary residence? Remember the allowable exclusion of $500,000 ($250,000 not married) of the gain on home sale
Remember that the 3.8% investment income surtax applies to the lesser of net investment income or the excess of modified adjusted gross income over $200,000 (individual) or $250,000 (married, filing jointly)
Bear in mind that a 20% capital gains tax applies to individuals filing in the highest tax bracket

Look for ways to defer or reduce income

Make note of your projected marginal tax rate
Look for ways to defer year-end payouts, including:

Capital gain property sales


Boost W-2 withholdings if necessary
Accelerate deductions
Check for deductions from fully funded education savings accounts
Use municipal bonds for federal and state (if applicable) tax-exempt income
Look for ways to bunch itemized deductions

Review Your Retirement Plan

Your retirement strategy is an important part of your overall financial plan. And while you may not be looking to retire anytime soon, you want to make sure you avoid small problems that could turn into glaring issues later on down the road. Tweak investments that don’t quite work for you and ask your financial advisor which opportunities are right for your portfolio. With careful attention to your retirement plan, you can look forward to your best financial future.

Review your IRA(s):

Maximize contributions to eligible accounts
Increase retirement contributions, if possible


If you fall into a low income tax bracket, consider converting from Traditional to Roth IRA

This can be a good option for when you have a low income year but anticipate a higher income in future years
Main benefit: future growth from Roth will likely be distributed tax-free


Learn more about collecting Social Security benefits
Review Net Unrealized Appreciation (NUA) opportunities for employer stock options
If you are 50 or older:

Look into catch up contributions for IRA and certain retirement plans
Avoid IRA/retirement plan distributions prior to age 59 ½ to avoid a possible 10% early withdrawal tax penalty


If you are 70 ½ or older, take your RMD
Do you have a new job? A plan participant leaving an employer typically has four options (and may engage in a combination of these options), each choice offering advantages and disadvantages.

Leave the money in his/her former employer’s plan, if permitted;
Roll over the assets to his/her new employer’s plan, if one is available and rollovers are permitted;
Roll over to an IRA; or
Cash out the account value

Employ a Financial Gifting Strategy

The holidays and other celebrations often signal open hearts and open wallets, especially in terms of financial gifts. Whether you’re gifting to family members as a holiday treat or as a wedding surprise, you can take advantage of these gifts when it comes time to plan your tax strategy. And if you donate to charity, you may be eligible for even greater savings. Don’t let another holiday season escape without learning the best ways to strategize your financial gifting.

Gifting to family

Gifts under $15,000/individual are federal tax-free
Put will and trust items in order to take advantage of both estate and income tax deductions
Invest in 529 accounts – up to $70,000 at one time

Gifting to others (including charitable donations)

Cash gifts to charity automatically qualify as income tax deductions
Consider gifting stock to qualifying charities
If you’re older than 70 ½ , take note of your Required Minimum Distribution (RMD) and plan charitable giving accordingly; you may be eligible to donate up to $100,000 and qualify for favorable tax deductions
Look into establishing a Donor Advised Fund (DAF) or private foundation for a cause you care about and receive further advantages:

Immediate tax deductions
Establish a framework for donor gifting over time


Consider bunching other charitable donations through the following vehicles:

Charitable Remainder Annuity Trust (CRAT)
Charitable Remainder Trust (CRUT)
Charitable Lead Trust (CLT)

Check in with Your Estate

Estate planning is an essential part of planning for your financial future. Whether you’ve got a game plan in place or want to get started with setting things in order, use the end of year review to assess your estate. You’ll also want to take time to account for any life changes that may impact your estate.

Double check your beneficiary designations and update them if necessary
Check trust funding
Review trustee and agent appointments
Evaluate provisions of powers of attorney and healthcare directives
Ensure that you fully understand all documentation

Wrap it up and Look Ahead

Periodic financial checkups – including your year-end review – keep you in control of your finances and leave the guesswork out of managing your financial goals. As you look through your investments, retirement plans and gifting strategies, you can evaluate what needs tweaking and set yourself up to take advantage of new opportunities. Sit down with your financial advisor to take a full-picture view at your portfolio and make sure you have solid understanding of your financial position moving forward.

Send the following investment and capital gains information to your accountant to receive an accurate year-end tax assessment:

Income types you had during the year: salary, interest, dividends, short- and long-term investment gains, Social Security income, IRA withdrawals
Your Medicare tax responsibility (if applicable)
Plan for estimated taxes


Evaluate your HSA contributions and other healthcare expenses
Confirm FSA expenditures for the year
Check your credit reports, taking particular note of any suspicious activity

Federal law entitles you to free credit reports from nationwide reporting companies (Equifax, Experian, TransUnion) every 12 months at your request


Review 529 contribution amounts
Discuss major life events with your advisor, including:

Family changes (marriage, birth, death)
Job and income changes
Significant one-time purchases
Retirement or plans to retire
Concentrated positions you need to address


Check that your objectives, risk tolerance and preferences are in order

Sit down with financial advisor Jacob Sturgill to ensure you have a solid understanding of your financial position

    Important Disclosures:

    The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
    This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

    Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.

    The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

    LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.