End of year financial check list

Financial planning for the new year

GOLDEN VALLEY, Minn. -- KARE 11 News at 4 p.m. welcomed Jason Schuller, Wealth Management Advisor with Bell Banks to give viewers tips for getting their finances in order before the new year. Here are some of the topics he covered.

• Get those tax-deductible donations in! Learn how deductions can actually ease your tax burden and improve the lives of others at the same time. Clean out your garage and closets, gift to charity, and get a tax deduction! Taxpayers who itemize deductions can make gifts of personal property to nonprofits and receive a charitable deduction (lightly used clothing and furniture).

• Use your annual gift exclusion before Dec. 31. A person may gift up to $14,000 per year to any one person ($28,000 for a couple). Annual gift exclusion can be used to fund 529 plans for grandchildren and a generous grandparent who wants to jumpstart a 529 plan can frontload five years of gifts by gifting $70,000 in the first year ($140,000 for a married couple).

• Last year Congress made “permanent” a law that allows seniors age 70 ½ and older to donate up to $100,000 directly from their IRA to a charity and the gift can fulfill their required minimum distribution without being included in their adjusted gross income.

• Reduce your taxable income by fully funding your 401(k) or increasing your contribution amount ($18,000 max contribution for those under age 50 – 50 and older can contribute up to $24,000).

• You can also reduce your income by funding a Flexible Spending Account (FSA) or a Health Savings Account (HSA) if you have a high deductible health plan). In both cases money can be withdrawn tax free when used for qualified medical, dental, vision, and prescription expenses. We can discuss the differences between the two types of accounts.  Did you know an HSA can double as a retirement savings account and, unlike an IRA, it can provide a tax deduction for the contribution and then be withdrawn tax-free when used for qualified medical expenses (or it can be contributed pretax). Many wealth advisors have started suggesting that clients fully fund their HSAs first and then fund their 401(k). A recent Fidelity study suggests a couple retiring today will need $260,000 to pay for health expenses in retirement.

• Review Your Estate Plan
You should do this every 3-5 years or more. Did you get married over the past year? Or divorced? Has your financial situation changed significantly?


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