Because You Asked: Is There Anything I Should Do Before the End of the Year?

Year-End Financial Decisions to Consider

In the midst of important decisions related to Black Friday shopping, Cyber Monday, and Giving Tuesday there are some additional decisions that we recommend our friends consider before the end of the year.  Here is a list to consider what might work for you:

  • Contribute to a 529 for a child or grandchild. You can review info regarding 529 plans here:

Because You Asked: Why Should I Consider a 529 Education Savings Plan?

  • Consider a Roth Conversion from an IRA- this can be especially effective this year for those who would normally take a Required Minimum Distribution that was not required this year by virtue of the CARES Act passed in March.
      • Remember that you pay taxes on whatever amount of assets you convert from an IRA to a Roth IRA in the year of the conversion. Here is a post that goes into the subject with more detail:

Because You Asked: How Is a Roth IRA Different from an IRA?

  • If you are age 70 1/2 before 12/31, you can elect to make charitable contributions from your IRA via checks made out to charities from your custodian.  These are called Qualified Charitable Donations or QCD. You will need to get these requests in quickly, in order for them to process before year-end.  One caution is to keep good records for your tax preparer so that it does not get counted as a taxable distribution to you!

Because You Asked: What Is The Most Efficient Way to Give to Charity? (Part 1)

  • Contribute to (or set up) a Health Savings Account. You can actually wait until your tax filing deadline to make contributions for 2020, but it has to be set up before the end of the year.  More info:

Because You Asked: What is a Health Savings Account (HSA) and How Can it Benefit Me?

  • Give stock or other assets that have increased in value either directly to a charity or to a Donor Advised or Charitable Giving Fund. Because You Asked:

     What is the Most Efficient Way to Give to Charity? Part 2: Appreciated Stock

       Because You Asked: What Is the Most Efficient Way to Give to Charity? Part 3: Donor Advised Funds

  • You may also want to take the opportunity to give money to your children or other family members before the end of the year.  As an individual, you can give up to $15,000 to any other individuals without having to file a gift tax return.  Therefore, as a couple, you could gift up to $30,000 to any individual or multiple individuals without filing a gift tax return ($15,000 each).   You can also give them appreciated stock.  This means that you will not pay taxes on the sale of the asset, but the receiver will pay taxes on the gain when it is sold. 


  • There is a lot of discussion going on about Joe Biden’s plans or intentions with regard to taxes but of course, it is currently just speculation, given that we won’t know the final makeup of the Senate until January. But IF you want to take advantage of this year’s current tax rates, it might make sense to consider selling stocks, etc. that have increased in value while you have low or low-er tax rates connected to capital gains. We cannot predict exactly when tax rates will increase, except that we know our current personal tax rates are already scheduled to expire in 2025. 
We hope this gives you some ideas for your financial picture as we move closer to the end of 2020- and won’t that be a relief, in and of itself! 
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