End of Year Money Moves

The end of 2021 is fast approaching. If notable changes took place in your personal or professional life, then you may want to review your finances before year end. Here are a few questions to consider.

Should you engage in tax-loss harvesting?

Tax-loss harvesting is the practice of taking capital losses (ex: selling securities for less than what you first paid for them) to manage capital gains. Up to $3,000 of capital losses in excess of capital gains can be deducted from ordinary income, and any remaining capital losses above that amount can be carried forward to offset capital gains in upcoming years. Engaging in this strategy can be advantageous for some and should be made with the guidance of your tax preparer.

Should you itemize deductions?

You may want to take the standard deduction for the 2021 tax year, which has risen to $12,550 for single filers and $25,100 for joint. If you think it might be better for you to itemize, now would be a good time to gather the receipts and assorted paperwork. Again, consult your tax preparer if you have questions about which strategy is best for you.

Are you thinking of gifting?

Are you considering donating to a qualified charity or non-profit organization before 2021 ends? Your gift may qualify as a tax deduction. For some gifts, you may be required to itemize deductions using Schedule A.

Is your estate strategy up-to-date?

Take a look at your beneficiary designations and double check to see that the assets are structured to go where you want them to go in the event that you pass away. It can also be beneficial to review your will and verify it is still laid out as you would like it.

Are your withholdings accurate?

Now is the perfect time to check on the amount you have withheld. If you discover you have withheld too little on your W-4 form, you may need to adjust this withholding before the year ends.

If you have questions on these or other items, please reach out to our team before year end. Small end-of-year moves might help improve your short-term and long-term financial situation.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. © Twenty Over Ten