It’s December and we are all busy with a lot of things to do before the holiday season and the New Year. There are many year-end planning articles and recommendations out there, but here are our takes with Top 3.
3. Do financial to do items that have to be done before the end of the calendar year.
- Contributions to your retirement fund account. (If contributing to your IRA, the deadline is April 18, 2023.)
- Take Required Minimum Distributions (RMDs) from your retirement account.
- Contributions to 529 plans. You are allowed to subtract up to $10,000 in contributions if you are single and $20,000 if you are married filing a joint return for contributions you made to the “Bright Start” program, the “College Illinois” Illinois Prepaid Tuition Trust Fund, or the “Bright Directions” program during the tax year.
- The annual gift tax exclusion amount for 2022 gifts to individuals is $16,000, or $32,000 if you want to make a joint gift with your spouse.
- Fund your HSA. The limit for 2022 is $3,650 for self-only coverage and $7,300 for family coverage.
- Other payments that can qualify for tax deductions, including charitable contributions.
- If you own stocks or business interests, discuss with your tax advisor to see if there’s anything you can do to increase tax efficiency.
2. Do your own personal audit for your health, finances, and insurance.
- Are you up to date with your regular check-up with your doctors? Remember to take good care of you.
- Are your beneficiary designations done and up to date? Majority of people own the bulk of their assets in retirement accounts and other transfer on death accounts. Do make sure that you have designated your beneficiaries and that they are up to date.
- Do create an asset inventory for you. It will serve not only you but also your loved ones if or when you are not able to handle things yourself.
- Do review all insurance you have, including auto, home, life, and umbrella policies, to see if they are adequate and up to date. n
1. Do make sure that you have “Essential Legal Documents” that can take care of you and your family.
- Post-Covid, it is more essential than ever to have essential legal documents.
- Power of Attorney for Property and Power of Attorney for Health are very documents that can take care of you and your family in the event you become disabled.
- Do a proper consultation with an estate planning attorney to see if you need a will or trust, or both. Please beware of well-meaning but inaccurate advice from your friends or neighbors, as well as DIY documents online. They can be very costly with unintended consequences.