Jumpstart Your Year-End Planning
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
What are the key items to consider by year end to help insure your investments and personal finances are on track for 2020and beyond? Our year-end monthly checklists may help you get started.
In October:
- Review your portfolio with your financial advisor to help ensure your allocation still aligns with your goals.
- Ask your financial advisorfor a realized and unrealized gain/loss report to asses the income and/or capital gains you should expect this year.
- Determine whether the 0%capital gain rate will apply to your situation this year.
- Review tax-loss selling strategies if you have capital gains but wish to keep exposure to a depreciated sector or security. Remember, the last day to double up a position to help avoid a wash sale in November 29, 2019.
- Meet with your tax advisor to prepare preliminary tax projections and evaluate whether to defer income or accelerate expenses.
- Determine if any adjustments are needed to tax withholding or estimated payments.
In November:
- Create or add to your education saving program.
- Review yourbeneficiary designation and make any necessary adjustment due to life changes (e.g. birth of child/grandchild, marriages, divorce death, etc.).
- Develop a plane to complete charitable and family member gift by year-end.
- Review your Medicare Part D choices if you receive Medicare benefits; the window for enrolling or changing plans is October 15 to December7.
- Consider funding a flexible Spending Account (FSA) and / or a Health Savings Account (HAS), if applicable during your employer’s annual benefits enrollment period.
- Review your insurance coverage to make sure it’s adequate for your needs.
Before December 31:
- Maximize your contributions to your employer retirement accounts. If contributing to your IRA, the deadline is April 15, 2021.
- Remember that the trade date, not the settlement date, determines the year of the sale date and recognition of any gain or loss in most situation when selling securities your own. Trades executed on or before December 31, 2020 will be taxable events in 2020.
- Take required minimum distributions (RMDs) if you’re age 70½ or older; discuss with your tax advisor the suitability of qualified charitable distributions (QCDs).
- Make gifts to individuals or charities .The annual gift tax exclusion amount for 2020 gifts to individuals is $15,000.
- Complete any Roth IRA conversions.
- Determine if now is the time to exercise or disqualify any company–granted stock options you won.
- Prepare for filling tax returns by organizing records of receipts for income and expenses.
- Take precautions now to avoid tax-related identity theft; if you suspect that you’ve are received a scam letter, phone call, or email, contact the Treasury Inspector General for Tax Administration at 1-800-366-4484.
- Make an appointment to talk with your local Social Security Administration office early if you 2021 or will reach full retirement age for Social Security in 2021.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
-----------------------------------------------------------------------------
