5 End of Year Questions

It is nearing year-end and I cannot emphasize enough how important it is to double-check certain items NOW. The best financial advisers can and should be drawing your attention to these items in order to make your year-end easier and less stressful. 

Here is a list of questions I review annually with clients:

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1: Is there a big difference (increase/decrease) in your compensation this year versus last year? Did you retire? Move? Get promoted?

  • If your compensation is greater, then think about talking with your CPA before December 31, 2018 about ways to minimize taxes if possible by making a tax-deductible IRA contribution for a spouse (if allowed), making tax-deductible charitable contributions in 2018 or maxing out your 401k contribution for 2018.*
  • If your compensation is adequately less than last year, then you could be eligible to contribute to a Roth IRA (by April 15, 2019) or do a Roth conversion (by December 31, 2018).

2: Did you or your spouse switch jobs this year?

  • If so, do you know where your 401k monies and/or company stock are? Did you consider a rollover of those 401k (or 403b) monies?
  • If you or your spouse switched jobs this year, were they out of work briefly or for an extended time? (See #1.)

3: For business owners (especially small businesses) did any of your employees become newly eligible for your retirement plan? Did your company grow?

  • Do you have the best type of retirement plan (SEP, 401k, SIMPLE) for your size business?

4: Did you do all of your charitable giving for the year?  

  • These gifts must be made by December 31, 2018 and are likely tax-deductible if given to a qualified charitable organization. With the 2018 tax changes, these could be meaningful to make up for lost tax deductions.*

5: Did you pick the best healthcare plan for you and your family for 2019?  

  • Did you consider a Health Savings Account, or HSA(for those relatively healthy)? These vehicles are tax-deductible AND are not use-it-or-lose-it like FSA accounts.
  • Did you have a baby this year? How does that change your healthcare plan?
  • Did you review your choices and the costs with your financial adviser?

One extra question:

6: Did you inherit money this year from a person who passed away?

  • If so, did you set up the appropriate Inherited IRA? The IRS will penalize you if you do not meet certain requirements. Also, important- did you double-check your beneficiaries on your IRA and company retirement plan?
  • When is the last time you reviewed ALL these things and more with your adviser?


*Consult your tax adviser on ALL tax-related matters.


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