There’s only one month left this year to take advantage of financial moves that may be in your favor. Is your income low this year? If yes, you may consider converting some traditional IRA assets to a Roth and paying taxes at a low rate. If your income is low enough, you may be able to sell stock at a gain and pay no Fed taxes. If your income is high, you may want to give a gift of appreciated stock to someone who has little or no income and have them sell it (but maybe not to your minor or young-adult children because of the sneaky kiddie tax). Or you may want to donate appreciated stock to charity instead of cash. Do you have stock with unrealized tax losses? Sell it before year end to offset gains or even reduce earned income. Did you turn 70-1/2 this year or in a past year? You may need to take required distributions from retirement accounts. Or maybe you inherited a retirement account? You may need to take a required distribution from this account even if you’re younger than 70 and even if it is a Roth IRA. Do you have lots of cash? Consider adding more to retirement accounts from your paycheck and use the cash to pay bills. Do you have money left in a flexible spending account? Spend it! But you may NOT want to spend money in an HSA. Just beware many of the pitfalls of completing any of these actions incorrectly or it may backfire on you. Speak to your adviser to make sure you are executing financial strategies properly.
Larry Pike, CFA
Client Priority Financial Advisors LLC
www.clientpriority.com
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