As we approach year-end, there are a few things you need to tend to financially before you launch into full holiday season mode. Before we say goodbye to 2021 it’s time to assess the year and outline what you want 2022 to look like. Here’s our top 5 areas to review before year end to make sure you are on track.

Now if your investments are held inside a retirement account, you can ignore this topic all together as your retirement withdrawals will be taxed as ordinary income down the road when you withdraw, except for Roth IRAs and Roth 401(k)s, which are withdrawn tax-free.

Year End Checklist

You can take the money from one or several of your accounts, but the total required is based on the value of ALL your retirement accounts as of last year-end (2020). The amount of your RMD can be easily calculated by any one of your plan custodians if you give them the total value of ALL your accounts.

Now is the time to decide if you want to take some gains — and to minimize the taxes by selling any losers you might have. You can offset capital gains and losses, both short term and long term, to save on taxes. But you can only deduct $3,000 of capital losses against ordinary income. **Don’t think you can take a loss for tax purposes and then buy the stock back right away, or even a few days later in the new year. You’ll be caught in the “wash sale” rule if you repurchase that stock within 31 days. And your loss will be disallowed.

 

It’s the best way to show gratitude for your good fortune.

 

Is your portfolio diversified enough to withstand the roller coaster nature of the stock market? Are you earning residual passive income from your investments?  Yield and income are here: www.hisfund3.com

 

Source: Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.”

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