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4 Year-End Planning Tips

Posted by John Posey on December 18, 2019

Here are four quick tips that come to mind as you tie up the loose ends in 2019. For a full comprehensive checklist as you prepare for the end of the year, click here.

  • If you’re older than 70 ½, have you taken your required minimum distribution (RMD) for 2019? I can confirm all applicable Plains Advisory clients have completed the RMD requirement or are making the necessary arrangements themselves, so thank you for being an inspiration to others! It is a hefty penalty (50% excise tax applied to the shortfall!) to miss those minimum distributions so make sure you think about all the retirement accounts and IRAs (excluding Roth IRAs) you have out there.
  • Did you fund a NEST 529 College Savings Plan for a child or grandchild yet? This is a calendar year contribution deadline, so make plans to get it done soon if you want the state of Nebraska tax benefit in 2019. Account owners are eligible to receive a Nebraska state income tax deduction of up to a maximum of $10,000. Click here for more info.
  • Do you plan on making charitable donations yet for 2019? If you’re over 70 ½ you may want to make that contribution directly from your IRA. Qualified charitable distributions (QCDs) are tax-free distributions sent directly to qualifying charities from IRAs whose owners are over 70 ½ . These distributions also can apply towards your required minimum distribution. This could be a much easier way to a get a tax benefit when giving to charity. If you’re under 70 ½ , you might consider lumping and clumping charitable contributions, property taxes and other eligible itemized deductions every few years in efforts to exceed to the standard deduction (2019 - $24,400 married filing jointly, $12,200 single) and produce some material tax savings.
  • For those in the workforce yet, did you fully fund your IRA? You do have until April 15 next year to fund that IRA for 2019, but you might want to start thinking about that now. Keep in mind many retirement plans offer a higher contribution limit once you reach age 50. I would encourage small business owners evaluate their ability to maximize retirement savings at least annually. Spousal IRAs can also provide another tax-advantaged savings opportunity for couples with a non-working spouse.  

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Advisory services offered through Plains Advisory LLC, an investment adviser registered with the State of Nebraska. Insurance products and services are offered and sold separately through John Posey, a licensed insurance agent. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

Any information provided is designed to provide general information on the subjects covered, it is not, however, intended to provide specific legal, tax, financial or investing advice and cannot be used to avoid tax penalties or to promote, market, or recommend any plan or arrangement. Please note that Plains Advisory LLC does not give legal advice. You are encouraged to consult an attorney.