2020 Year End Planning

Year-end planning is an important part of investment management.  With a full year’s worth of information on hand, we can appropriately plan to position accounts to optimize tax efficiency and current allocations.  To that point, please find a few helpful reminders for year-end planning below.


Charitable Giving

If you are wishing to make any charitable contributions using appreciated stock positions, please call our office earlier rather than later this year to ensure the gift is completed by year end.  Remember, the Standard Deduction has been increased to $12,400 for individuals and $24,800 for Married Filing Jointly so you may not be able to deduct all your contributions.  That does not mean you still shouldn’t be considering them.  As we’ve mentioned in the past, you can make multi-year contributions by bunching them up this year and committing them over several years to come.  This can be done by contributing to a Donor Advised Fund or working with the charities of your choice and explaining your intentions. The CARES Act does allow for everyone to deduct up to $300 for charitable contributions this year whether you itemize or not, so that should be considered as well.  Also, if you are 70 and 1/2 or older, you can still make qualified charitable contributions from your IRA.


Withholding Confirmation

If you are still working, consider adjusting your withholdings based on any changes in wages you experienced for 2020.


Planned Giving

Consider giving annual gifts to children and/or grandchildren if appropriate this holiday season.  Lifetime giving can be an important component of an estate plan.  Your advisor can help with this discussion.  The annual gift exclusion for 2020 is $15,000.


Capital Gains Review

Review your gains and losses taken in your taxable investment accounts for this year.  In a year of volatility, there may be more trading than normal.  This can be important information for your tax preparer.  If you have any additional questions, please call your advisor.


Automatic Withdrawals

If your Required Minimum Distributions (RMDs) were coming to you monthly and we discontinued that for 2020, work with your advisor and client service specialist to determine if you want to start those again in January of 2021.  The RMD was only suspended for 2020.  If you are taking your monthly distributions from a taxable account and found that you did not spend what you were withdrawing in 2020, consider adjusting that amount down for the beginning of 2021.


Asset Allocation

Considering what happened in February and March of this year, are you still at the right asset allocation for your investments?  If changes are needed, this would be an optimal time to make them.  The market’s recovery has provided an opportunity to adjust equity allocations if necessary.


If you would like to discuss any topics mentioned above, please do not hesitate to give us a call.

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