From ATX Portfolio Advisors:



As the holiday season approaches, it's easy to get caught up in festivities and overlook crucial financial tasks. However, taking time now to address year-end financial planning can set you up for a prosperous 2025. Here's a year-end checklist to guide you through essential retirement, tax, investment, and estate planning considerations..


1. Maximize Your Retirement Contributions
Why It Matters:
Building a strong retirement nest egg is crucial, and 2024 offers opportunities to maximize tax-advantaged savings.

• 401(k) or 403(b): The contribution limit for 2024 is $22,500. If you're 50 or older, don't forget the additional $7,500 catch-up contribution. If you haven't maximized contributions for the year, there may still be time to adjust your salary deferrals before year-end.
• IRA Contributions: You can contribute up to $7,000 for 2024 ($7,500 if over 50), provided you meet income eligibility requirements.
• Roth IRA Conversions: Consider converting traditional IRA funds into a Roth IRA, especially if you're in a lower tax bracket this year. "Filling up" lower tax brackets now can be a great strategy to reduce your lifetime tax expenses.

2. Optimize Charitable Giving
Why It Matters:
Giving back can be personally rewarding and financially beneficial.

• Appreciated Stock Donations: Instead of writing a check to your favorite cause, avoid capital gains taxes by donating appreciated stocks to charity. You may also qualify for a tax deduction.
• Donor Advised Funds (DAFs): If you don't have a specific charity in mind, using DAFs allow you to set aside funds for future giving while claiming a deduction this year.
• Qualified Charitable Distributions (QCDs): If you're 70 or older, donate up to $100,000 directly from your IRA to a charity without counting it as taxable income. This is especially efficient if you don't take itemized tax deductions.

3. Handle Required Minimum Distributions (RMDs)
Why It Matters:
Failure to take your RMDs can result in a 50% penalty on the amount not withdrawnan avoidable financial hit.

• If you're 73 or older, ensure your RMDs from traditional IRAs and employer-sponsored retirement plans are completed by December 31, 2024.
• Don't forget inherited retirement accounts if you're the beneficiarythe IRS has clarified rules on these accounts and are ending grace periods that have been in effect for several years.

4. Review Tax-Saving Opportunities
Why It Matters:
Smart tax moves can save you money both now and in the future.

• Tax Loss Harvesting: Sell underperforming investments to offset capital gains.
• Tax Gains Harvesting: If you're in a lower tax bracket, consider realizing gains to lock in a lower tax rate.
• Flexible Spending Accounts (FSAs): Use up your FSA dollars by year-end to avoid forfeiture, unless your employer allows a grace period or rollover.

5. Evaluate Your Investment Portfolio
Why It Matters:
Markets evolve, and so should your investment strategy.

• Rebalance Your Portfolio: Ensure your asset allocation aligns with your goals and risk tolerance.
• Non-Qualified Stock Options (NSOs): Exercise stock options with an eye on tax and investment implications.
• Review Performance: Assess whether each investment is meeting its intended objective.

6. Estate Planning and Family Gifting
Why It Matters:
Year-end is a good time to ensure your estate plan reflects your current wishes.

• Annual Gift Exclusion: You can gift up to $17,000 per recipient in 2024 without incurring gift tax.
• Update Documents: Review wills, powers of attorney, and beneficiary designations.

7. Review Your Comprehensive Financial Plan
Why It Matters:
Your financial plan is your road map. A quick review can highlight areas for improvement.

• Check Progress: Are you on track with retirement, education savings, or debt reduction goals?
• Adjust Strategies: Life changes may require updates to your financial strategies.

Why Timing Matters
Investment firms and advisors are particularly busy as the year ends, and financial transactions often have a processing delay. Start these tasks now to avoid the stress of last-minute scrambling and ensure your financial moves are completed on time.

Wrap-Up: Secure Your Financial Future
By tackling these tasks now, you'll head into 2025 with a solid financial foundation. If you'd like personalized guidance, schedule a consultation today to ensure your year-end planning strategies align with your unique financial goals.

Happy Holidays!

If you would like to learn more about ATX Portfolio Advisors, let's Get Acquainted.





Principal
jeff.weeks@atxadvisors.com
(512) 537-5955
www.atxadvisors.com


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