F I SCAL FI TN ESS
MICHAEL J. DONNELLAN King Financial, Inc.
YEAR-END FINANCIAL CHECKLIST So many people can’t wait for this crazy 2020 year to end, so here are some important considerations investors should work on as the holidays quickly approach. There are several reasons to make year-end financial and estate planning a priority, because when the year turns over there is no going back.
TAX ISSUES Probably the most complicated and time-consuming issue, but the one that can cost you, or save you, the most money. Some clients may need to generate gains or losses this year while the tax environment is still favorable. Another issue in this category is the Required Minimum Distributions (RMD) from qualified retirement accounts. Clients over 72 (new rule for 2020) must take their RMD this year or face stiff tax penalties of 50%. Also be aware of required distributions from Beneficiary IRAs.
MUTUAL FUND DISTRIBUTIONS As a general rule, don’t buy a mutual fund near the end of the year, without first checking when, and if, the fund will be
paying out a capital gain for the year. If you buy Fund ABCDX on December 5th and they distribute a capital gain for the year on December 15th, you are responsible for the tax on this year’s whole capital gain, even though you held the fund for only 10 days. Remember, a tax-sheltered account, such as an IRA, SEP, 401(k), etc. will not have this tax consequence.
REVIEW YOUR WILL, BENEFICIARIES & INSURANCE POLICIES Double-check that changes or updates are not needed on your accounts. It’s all too common to leave an ex-spouse, for example, assigned accidentally. Make sure you have the right amount of insurance for your needs. The insurance industry has become quite competitive and you can easily compare rates and possibly save hundreds, if not thousands of dollars. continued on page 14
12 | Official Publication of The Ohio Landscape Association
