After an eventful 2022, we wanted you to have a simple list of year-end items that should be considered. Please reach out to your Columbia Pacific Wealth Management financial advisor with any follow up questions on these items.
- Lower your tax liability by loss harvesting from your portfolio (strategies to avoid wash sales)
- Rebalance your portfolio
Income Tax Planning
- Manage income given the applicable tax bracket
- Learn strategies for reducing taxable income for closely held business owners
- Consider increasing your income tax withholding to avoid penalties
- Learn strategies to reduce AMT liability
- Evaluate state and local estate taxes
- Fund retirement accounts
- 401(k) contribution limits
- Annually through age 49: $20,500
- Age 50 and up: $27,000 (additional $6,500)
- IRA contribution limits:
- Annually through age 49: $6,000
- Age 50 and up: $7,000 (additional $1,000)
- 401(k) contribution limits
- Contribute to HSA accounts
- Fund Roth and other IRA accounts for children
- Consider Roth conversions
- Review RMD strategy—make sure you are taking your RMD and avoid penalty fees
- Review benefit elections for Social Security and Medicare programs
- Review beneficiary designations on your retirement accounts
- Make annual gifts or fund your charitable giving account
- Fund 529 plans
- Elect to make a charitable bequest directly from your IRA
- Consider advanced estate planning strategies ( i.e. trusts, family partnership, etc.)
- Conduct family meetings
- Review your estate planning documents
This is also a great time to review certain planning items with your financial advisor:
- 2023 Cash Flow—Review your actual 2022 spending. Create a 2023 budget and plan for big purchases, sales, and debt/loan refinance options during this low interest rate environment.
- Flexible Spending Account— If you have a FSA through your employer, are you on track to use the balance by the required date according to your plan? Any funds you don’t use, you lose.
- Credit Report—The Fair Credit Reporting Act requires each of the nationwide credit reporting companies to provide you a free copy of your credit report once every 12 months.
- Healthcare and Insurance—Review your medical and insurance policies to make sure they meet your coverage needs prior to annual benefits enrollment.
- Estate Planning—Review wills, trusts, power of attorney, and other documents designed to transfer or protect your assets. Review elections and appointments made within these documents to make sure you have the right executors, trustees, and guardians in place.
- Employer’s Benefits—Open enrollment is typically in December if you’re employed. Consider taking advantage of all available options, including a flexible spending account, health savings account, life insurance, and more.
Download this checklist by clicking below!