The end of the year is often a busy time when social calendars fill up and people’s minds turn to the holidays, but it’s also important to take time in December to do an assessment of your financial health.
David Ragland, CEO of IRC Wealth and a certified financial planner, provided FOX Business with a year-end checklist to complete this month before 2023 chimes in.
Ragland says one of the top priorities for workers is to maximize their 401(k) contributions. The accounts are one of the best long-term investment and tax-saving plans available to employees. People under 50 can save up to $20,500 in a 401(k) this year, and anyone over 50 can contribute up to $27,000.
Next year, the limits increase to $22,500 and $30,000, respectively.
Investors may also want to consider a year-end rebalancing of their 401(k) investment account, making sure they are not overexposed in certain areas. “Nothing wins forever,” Ragland explains.
Call the doctor
People who have already reached their out-of-pocket maximum on their health insurance plans should consider making appointments with doctors or other health care providers to try to get a visit before the end of the year to minimize any out-of-pocket costs. out of pocket expenses.
Ragland recommends that people meet with their CPA or other tax professional before the end of the year to review their estimate. Fiscal Responsibility 2022 and make plans on how to reduce it.
You can file a new w-4 form Contact your employer to adjust your withholding. That won’t lower your 2022 tax liability, but it may keep you from owing taxes next year.
Anyone who lives in a state that has “state tax credits” should check for availability and make such a purchase as soon as possible, he advises. Some state tax credits have been in short supply, so it’s best not to wait until the last minute.
Ragland says some people may want to consider selling investments that are currently losing money and buying back the same investment 31 days later. The strategy generates a loss for tax purposes without giving up a favorite stock or Investment fund (ETF) forever.
The wealth expert also pointed to several proven practices, such as making annual cash charitable contributions before the end of the year, as well as donating clothing or furniture to a favorite charity for a non-cash charitable deduction. Those who make monthly contributions to a charity might also consider making their Q1 2023 donation this month.
Another item on your personal finance to-do list is paying any state income or real estate taxes due before the end of the year, as well as any estimated January 15 state income tax payments.
Ragland says the key is simply taking the time to assess your personal financial situation, develop goals, and act on a plan. “Getting rich is super simple,” he said. fox business. “It’s just not easy.”