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Year End To-Do List

We've got a little over a month until the end of 2023. Here are 6 simple things you should do (or at least check) before year end:

December 31st

1. Contribute to Retirement Accounts

Review your retirement accounts (401k, IRA, etc.) to make sure you’re on track to max or hit whatever goal you set.

The end of year deadline really only applies to employer sponsored retirement accounts like 401ks, SEP IRAs, or SIMPLE IRAs. Roth and Traditional IRAs, and HSAs, have a contribution deadline of tax-filing date; so April 15th, 2024 for 2023.

2. Take your Required Minimum Distributions (RMDs)

This doesn’t apply to everyone. Generally, RMDs apply to IRA account holders age 72 and older, or inherited IRA account holders no matter their age.

RMD rules have changed A LOT in recent years so it’s important to know which RMD rules apply to you.

Failing to take your RMD results in a tax penalty of 25%, in addition to ordinary income tax.

If you’re ever in this position where you missed an RMD, the IRS does allow for exceptions at times. So if the penalty is large it is worth looking into the exceptions and writing a letter.

3. Harvest Tax Losses

Review your investment portfolio for any investments that are currently at a loss. Consider selling these investments to realize the capital losses. Capital losses can be used to offset capital gains, reducing your overall tax liability. If your capital losses exceed your capital gains, you can use the excess losses to offset other income, up to certain limits.

4. Check your Flex Spending Accounts to make sure you’re not forfeiting any money.

FSAs (dependent care and health) are use-it-or-lose-it. So if you don’t spend everything in your FSA you lose that money.

  • Most Health FSAs now allow for a $610 rollover from one year to the next, or a grace period that allows you to spend last year’s money in the next year.

  • Dependent care FSAs do not have this rollover or grace period, so if you have unspent money you will lose it. Ask your daycare if you can prepay some for next year!

5. 529 contribution

Most states have a year-end deadline for tax-deductible 529 contributions. So if you want to get a state tax deduction for this year you need to get the money in by 12/31.

6. Check your PTO to make sure you’re not losing any unused vacation days!

I'm sure I missed some, if not a lot, of end-of-year tasks. If I missed any that you think are important let me know!

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