Checklist for Year-End Financial Reporting at Foran Financial Group

As we prepare to spend time with our loved ones for the holidays, it’s easy to get distracted. But don’t forget to set aside some time to assess your accounts and close any loose ends before the new year arrives.

There are ten things to do before 2021 that the Foran Financial Group team has compiled into a year-end financial checklist. In order to optimise your tax savings and gain financial security for the new year, go over this list first.

Maximize contributions to your 401(k) or IRA

You have until the end of 2020 to make all of your retirement contributions. To maximise your savings and lower your tax burden, speak to your financial adviser about changing the amount of withholdings you already have in place.

Take a look at the minimum distributions required (RMDs)

RMDs have been halted for 2020 under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Having saying that, you should still bring your own if any of the following applies:

  • Is your tax bracket lower now than it is in the future?
  • You’d want to reduce the number of RMDs you’ll have to take in the future.
  • If you don’t need the money, you’d rather give it away to a charity of your choice.

In 2021, annual RMDs should be reinstated…. Then, in order to avoid fines and costs, you must take your whole RMD before December 31.

Consider converting your IRA to a Roth IRA

Even if you currently have a Traditional IRA, a Roth IRA may make financial sense for you. If your salary is too high to qualify for a Roth IRA, you may be able to contribute via a Roth Conversion at the end of the year. A tax-saving approach for you and your beneficiaries may be found in working with a financial adviser.

As we approach the year 2021, do you have any doubts concerning your financial situation? See how we can assist you by contacting the Foran Financial Group team now!

Make the most of your HSA (HSA)

Unlike other types of investments, HSAs are completely tax-free. Funds do not need to be re-invested each year, since they are unlike those in Flexible Savings Accounts (FSAs). You may be eligible for an HSA if you have a high-deductible health insurance plan, and you should make it a point to use it to its fullest each year.

Individual health savings accounts (HSAs) may contribute up to $3,550 in 2020; family plans (FSAs) can contribute up to $7,100. If you’re above the age of 55, you’ll be able to give an additional $1,000.

When it comes to finding the proper insurance policy for you, Foran Financial Group is here to assist. Make an appointment with the staff at Foran Financial Group for a no-obligation discussion to learn more about how this is done.

Make the most of your FSA money

If you don’t utilise your FSA money by the end of the year, you’ll lose them. Consider how much money you currently have in your account and make a game plan for how you’ll spend it as soon as you get it.

You may now utilise FSA money for over-the-counter medications and other necessities under the CARES Act, which was previously not possible.

If you find yourself with too much or too little money in your FSA at the end of the year, this is a good opportunity to alter your contributions for the following year. The maximum contribution limit per employee for 2021 is $2,750. ‘

To offset any capital gains, you should rebalance your investment portfolio

Reviewing your assets before the new year may help you reduce your taxable income and make sure you’re not taking on too much risk. Investing in a “money-losing” position and harvesting your profits may be an option if you’ve achieved capital gains. Talk to a financial professional to get the entire picture of your alternatives.

Examine Your Will or Trust

Our lives are so vulnerable that 2020 has shown us this. You may ensure that your estate plan is up-to-date by checking the following four items:

  • Will
  • Trust
  • Attorney-in-fact
  • Beneficiaries

For those who have friends or family members who may benefit from the yearly gift-tax exclusion of up to $15,000, now is a good moment. Foran Financial Group has published a blog article entitled Foran Financial Group Reviews POAs, Health Directives, and Insurance, in which we discuss the essential elements of an estate plan.

It’s time to check up on your insurance coverage

Make sure you have adequate insurance coverage and that your deductibles aren’t too expensive by reviewing your plans. You’ll want to check out some of the most prevalent policies, such as:

  • Planned giving
  • Insurance for health care
  • Incapacity protection
  • Insurance for your car

Your insurance requirements may be reviewed with the assistance of the Foran Financial Group, as mentioned before.

Look into Your Options for Charitable Giving

In 2020, the CARES Act established a number of tax incentives to encourage charitable donations. Here are two things to think about:

Previously, you could only deduct 60 percent of your gifts from your Adjusted Gross Income (AGI).

Donations of up to $300 may be deducted “above the line” from your taxable income if you use the standard deduction.

A Qualified Charitable Distribution (QCD) is an option if you’re compelled to accept RMDs but don’t need the money (QCD). These contributions reduce your AGI for the year, which lowers your Medicare premiums and lowers your taxable Social Security. You may contribute up to $100,000, or as much as your RMD is worth, whichever is less.

Talk to a financial professional about your alternatives and discover what works best for you.

Reflect on the Year That Has Passed and Make Plans for the Next

Take a look back at what you’ve done this year at the conclusion of the year. Did you get your finances in order? Have you reached a new financial milestone? Is it time to plan your retirement?

Think about what you want to achieve in the next year as you reflect. There are a number of reasons why you would wish to get your mortgage paid off or establish a college fund for your grandkids. Whatever it is, taking a breather and recharging your batteries before the new year may help you remain focused and enthusiastic.

It all comes down to this:

We are only a few days away from the start of a new year. If you’re ready for the new year, Foran Financial Group wants to help. Please contact us if you have any questions or concerns about this checklist or your money. Financial planning for the new year is something we can assist you with. The Foran Financial team is here to help you get started on the right foot in 2021!

To the best of our knowledge, the information in this article is not meant to give particular advice or suggestions for any one person or situation.

This material is not meant to replace the services of a qualified tax or legal professional. Consult with a tax or legal professional if you have questions about your individual circumstances.

Before converting a traditional IRA to a Roth IRA, holders of traditional IRAs should think things through. Income tax effects, withdrawal restrictions, and income limits for future contributions to a Roth IRA are among the most important aspects of a Roth IRA conversion. A required minimum distribution (RMD) must be taken before converting to a Roth IRA in the year you make the conversion.

Click Here For More Articles

Leave a Comment