Year-End Financial Checklist to Prevent Tax Penalties and Missed Planning Opportunities
As you approach the end of the calendar year, there are many financial deadlines and cutoffs that you may not be aware of. From minimum distributions to annual gifting exemptions to tax-loss harvesting, there are more annual rules and limitations than any one human could reasonably be expected to know.
To simplify the year-end management of your finances, here are the top nine deadlines and cutoffs to be aware of.
Required minimum distributions: Dec. 31
For those over the age of 70½, RMDs are annual withdrawals required by the IRS to be made from qualified retirement accounts. These include standard IRAs, 403(b)s and 401(k)s if you no longer work at the company, but exclude Roth IRAs, which are funded with post-tax deposits. The RMD for each account is based on the balance of the account as of Dec. 31 of the prior year and your age, among who assists you with your financial planning, you can task them with ensuring that your RMDs are made, but if you manage your accounts yourself, this is a withdrawal you must remember to execute every year prior to Dec. 31. If you fail to do so, the difference between the RMD for each account and the amount you withdraw will be hit with a whopping 50% penalty. (To figure out your own RMD, see s.)
