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Your Year-End Financial Planning Checklist

Before the holiday season gears up, there are some things you should check off your list so you can keep more of what you make and have more in the future.

Two women in a business meeting

Good financial planning isn’t just about the right investments, it’s about strategic planning around taxes and thinking through the long-term implications of the moves you can make now. That sounds like more than anyone wants to tackle when holiday feasts and cheers-ing are in the agenda, so we broke it down into bite-size chunks.

Hors d’oeuvre, anyone?

Topics for year end financial planning

Maximizing Tax-Advantaged Savings

401(k) Accounts

The maximum you can put into a 401(k) account in 2021 is $19,500 if you’re under 50 and an additional $6,500 for those 50 and above. With just a few pay periods left in the year, it may be worth it to up your contributions and put in as much as you can afford. You’ll pay less in taxes this year, and you’ll have another year of growth of the plan. If you haven’t contributed at least enough into your plan to get the company match, it’s important that you do that. Otherwise, you’re just leaving money on the table that could come in very handy during retirement.

Health Savings Accounts (HSAs)

HSAs were created to be used alongside High Deductible Health Plans (HDHPs). (For 2021, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family).

They allow you to save and invest money to be used for medical expenses, including deductibles, co-insurance, prescriptions, vision expenses, and dental care. Unused balances are carried over to the following year, funds never expire, and they can be passed on to a surviving beneficiary. In addition, HSAs are “triple tax-advantaged”, meaning that they are funded with pre-tax dollars, they grow tax-free, and withdrawals are not taxed if they are spent on qualified medical expenses. For 2021, individuals can contribute $3,600 and families can contribute $7,200.

Education Savings Plans

529 plans are tax-advantaged savings plans specifically designed to help parents pay for their child’s education (although, they can be used by more than just parents). 529 plans are not just for college – tax-free withdrawals may also include up to $10,000 per year in tuition expenses for K-12 schools. State tax treatment of K-12 withdrawals vary.

Although contributions are not deductible at the federal level, earnings grow federal tax-free and there is no federal tax on withdrawals to pay for qualified withdrawals. Depending on your state, you may be able to deduct contributions from your state taxes. You can contribute up to $15,000 per year per individual, or you can put in up to five years’ worth of contributions all at once and really get things going and (hopefully) growing.

Tax-Loss Harvesting

Scouring your investment statement looking for losses – with a positive frame of mind – is definitely not the usual. But in a year with big market gains, those losses can offset your capital gains as you rebalance your portfolio back to your preferred risk tolerance or just reset for next year.

Charitable Giving

The increase in asset values this year not only makes charitable giving more attractive, if you do it by gifting an appreciated stock directly from your account, you won’t have to pay capital gains but you will get the full market value of the gift as a tax deduction.

Those over age 72 can use a qualified charitable distribution strategy that allows donations of up to $100,000 directly to a charity from an IRA instead of taking RMDs. This can help reduce taxes because you avoid taking income, which could mean staying in a lower tax bracket, and potentially lowering the amount of RMDs in future years.

The Bottom Line

Before the gift buying, travel arrangements, and party planning gets into full swing, it’s a good idea to check off the moves you can make that will minimize your taxes and set up your savings so that you can have carefree holiday seasons in the years to come. Basepoint Wealth advisors work hard to ensure that these, and many other, topics are reviewed regularly to ensure you keep more of what you have, and have more of it in the future.



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The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

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Basepoint Wealth, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.


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