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  • Writer's pictureSamuel Flaten

12 Things to Put on Your Year-end Financial Checklist

Updated: Dec 22, 2023

Day 31 of month, calendar on workplace background.

With holiday activities in full swing, many of us are busy making lists—for gifts, holiday meal planning, and so on. We made a list, too, but ours is not about shopping. It’s about smart financial moves before ringing in the new year.  It’s not too late! You still have time to:

  • Maximize your contributions to your 401(k) plan or Traditional IRA, and possibly a Roth IRA, including catch-up contributions for those over age 50. 

  • Take any required minimum distribution across all IRAs and 401(k) accounts if you have reached the age of mandatory distributions or have an inherited IRA. 

  • Consider a Roth IRA conversion. Remember that money you convert to a Roth is treated as a distribution from the non-Roth account, so you’ll need to pay ordinary income taxes on that amount. A Roth conversion can make sense if you are in a lower tax bracket this year than you expect in retirement, perhaps due to a gap in employment. 

Consider helping a child or grandchild who earned income this year (from a summer job, tutoring, etc.) to get a jump on retirement savings by contributing to a Roth IRA in that child’s name. You might offer to match whatever he or she contributes or whatever feels right to you.

  • Finish making any charitable contributions that are part of your financial plan. 

  • If your tax-deductible expenses are close to exceeding the standard deduction for the year, you may want to “double up” your charitable donations to cover this year and next year. If you itemize deductions rather than taking the standard deduction, charitable contributions will reduce your tax bill. You can either give directly to charities you choose or contribute to a Donor-Advised Fund before year-end and distribute the money to charities when ready. Talk with your tax professional or financial advisor about whether this makes sense.

  • Avoid paying capital gains taxes (legally) by donating appreciated assets instead of cash. By donating an asset, such as shares of stock, that has substantially increased in value since you bought (or inherited) it, you skip paying the capital gains tax you would owe if you sold it.  You donate the total value of the asset instead of the amount you would get from selling the investment and paying the taxes. Since it’s a gift to charity, current laws even allow you to choose specific individual tax lots instead of using average cost methodology! 

  • If you are in a position to make charitable contributions that are quite large relative to your income, perhaps from assets that have appreciated considerably or from inherited wealth, know that you can typically deduct cash donations up to 60% of your adjusted gross income (here are the IRS rules on this).

  • Reduce the size of your estate by making tax-free gifts (no wrapping paper required). These gifts do not count against your lifetime estate tax exemption; giving today rather than leaving everything as an inheritance has many benefits. You and your spouse can give any amount up to the maximum (which changes over time) to as many people as you like – children, grandchildren, or lucky people you want to help.

  • Offset investment gains with losses (known as “tax-loss harvesting”) if it is appropriate to change your mix of investments. The rules depend on how long you have owned the assets and can be tricky, so talk with a tax pro or your financial advisor if this applies to your situation. Avoid buying any mutual funds or ETFs until after they make their year-end distributions (check the fund’s website), or you will owe taxes on income and capital gains you did not receive. As of the writing of this article, Crypto is exempt from wash-sale rules, so make sure to harvest any losses regularly. 

  • If you have a flexible spending account (FSA) through your employer, check your balance because, unlike Health Savings Accounts, FSAs “reset” yearly. That means you must spend whatever is in the account or lose it. Many employers offer a grace period until mid-March, giving you more time to spend the money you contributed this year, but if not, you need to empty the FSA by December 31st.

The remaining items on the list don’t have to be by any deadline, but we strongly recommend making an early New Year’s Resolution to take care of them ASAP. The lull between Christmas and the end of the year is an excellent time to:

  • Make sure the beneficiaries on your banking and investment accounts are up-to-date.

  • Complete an Advance Health Care directive that names someone to make medical decisions on your behalf if you cannot make them for yourself, and provide a copy to your primary care physician.

  • Consider giving someone you trust the authority to handle your financial matters using a Financial Power of Attorney (POA) form for your state (available online for free). The “durable” POA is effective immediately; a “springing” POA becomes effective only when you cannot manage things independently.

  • Review your insurance coverage to ensure it is still adequate to cover the value of your home, and consider a personal liability umbrella policy to protect yourself and your family against lawsuits.

Want more information?

Get a head start on your financial planning by downloading our comprehensive Year-End Financial Checklist below. Ensure a smooth transition into the new year with our helpful tips and recommendations.

Download PDF • 181KB

Here’s to ending this year with wise moves to help maximize the benefits your financial plan brings to you and your family throughout next year.

Disclosure: Advisory Services are offered through Gold Medal Waters, a Registered Investment Advisor.  This post and material presented are for informational and illustrative purposes only, and do not constitute investment advice and is not intended as an endorsement of any specific investment. As is such, this material is not client-specific, we make adjustments in individual portfolios based on each client's financial plan, income needs, risk tolerance and total asset allocation.  Interactive checklists are made available to you as self-help tools for your independent use and are not intended to provide investment advice. While Gold Medal Waters believes information derived from third-party sources to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability in regards to your individual circumstances.  Investors should carefully consider the investment objectives, risks, charges, and expenses associated with any investment.  The information discussed is not intended to render tax or legal advice.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.  Investing involves risk including the potential loss of principal, and unless otherwise stated, are not guaranteed. Past performance does not guarantee future results.  No investment strategy can guarantee a profit or protect against loss in periods of declining values.  Consult your financial professional before making any investment decision.


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