year end financial planning tips and reminders

December is a great time to review your entire financial picture and consider some time-sensitive planning opportunities. Consider these year-end financial planning tips and reminders. Perhaps you…

  • Are considering making the year-end gifts to charitable organizations or family members and need to determine your optimal funding strategy
  • Are looking to reduce your income tax liability this year and are seeking loss harvesting and income-reduction opportunities or
  • Wish to make a high-level survey of your financial picture, ensuring that you aren’t missing any windows of opportunity that close with the calendar year.

Here’s a handy checklist outlining Year-end financial planning tips to guide your end-of-year review. 


Tax Planning

  • Have you accounted for any equity compensation this year?

    If you had Restricted Stock Units (RSUs) or stock options that vested, or if you exercised stock options, did you account for the additional taxable income for the year and either withhold the appropriate taxes or make an estimated payment? Consider getting a tax projection to determine if you should make an estimated payment in January and potentially avoid an under withholding penalty.

  • Did you account for taxes on any lump sum bonuses you received this year?

    Federal tax withholding on lump sum bonuses is at a statutory 22% rate. However, if your marginal tax rate is above 22%, the withholding was likely insufficient. Consider getting a tax projection to determine if you should make an estimated payment in January and potentially avoid an under withholding penalty.

  • If you expect to be in a higher income tax bracket in the future,

    consider making Roth contributions to your retirement plan this year. Also consider completing Roth conversions before the end of the year.

  • If you expect to be in a higher income tax bracket in the future and you are at least 59 ½ years old,

    consider accelerating your IRA withdrawals to fill up lower tax brackets.

  • If you expect to be in a lower tax bracket in the future,

    this may be the time to make pre-tax contributions to your retirement accounts instead of Roth contributions.

  • If your Modified Adjusted Gross Income (MAGI) is over $200,000

    ($250,000 MFJ), you may be subject to the 3.8% Net Investment Income Tax on the lesser of net investment income or the excess of MAGI over $200,000 ($250,000 MFJ).

  • If your medical expenses exceed 7.5% of your adjusted gross income and you itemize your deductions,

    consider accelerating planned medical expenses into 2023. Medical expenses are deductible to the extent that they exceed 7.5% of your adjusted gross income and only if you itemize your deductions.

  • If you are currently on Medicare,

    consider the impact of IRMAA surcharges.

  • Consider the impact of changes in your family situation this year.

    For instance, changes in marital status will necessitate changes to your tax planning. Or you may be eligible for an additional Child Tax Credit if you added a child to your household this year.

If your taxable income is...

    • below $182,100 ($364,200 MFJ), then you are in the 24% marginal tax bracket. Taxable income in the next tax bracket will be taxed at 32%.

    • above $492,300 ($553,850 MFJ), any long-term capital gains will be taxed at the higher 20% rate.

Investment Planning

  • If you have any unrealized investment losses

    in your taxable investment accounts, you may be able to offset any gains or deduct up to $3000 against ordinary income.

  • If you have investments that are subject to end of year capital gain distributions,

    you may want to employ strategies to minimize tax liability related to the distributions.

  • If you have capital losses in your taxable investment accounts

    or a loss carryforward from prior years, you may want to take some offsetting gains.

  • If your taxable income is below $492,300

    ($553,850 Married Filing Jointly) this year but is likely to be over $518,900 ($583,750 MFJ) next year, consider taking some of your capital gains this year. The Long Term Capital Gains tax rate increases from 15% to 20% at these income levels.


  • You can use your annual exclusion amount to provide gifts of up to $17,000 per year

    per beneficiary gift tax-free. This means that a married couple could gift up to $34,000 to a beneficiary this year gift tax-free.

  • If you would like to help out a charitable organization,

    consider tax-efficient strategies for giving such as gifting appreciated securities or exploring a Donor Advised Fund.


  • If you have funds in a Flexible Spending Account (FSA),

    remember to check your plan sponsor's deadlines for using the funds. Funds in an FSA are use-it-or-lose-it funds.

  • If you met your health insurance plan's annual deductible,

    consider accelerating planned medical expenses into 2023 rather than waiting until the deductible resets.

Income Planning

  • Have you taken Required Minimum Distributions (RMDs)?

    If you have reached age 72, you likely need to take distributions from your retirement accounts (except Roth IRAs). And, if you have inherited a retirement account you may also be subject to RMDs.

education Planning

  • If you are saving/or higher education,

    consider contributing to a 529 plan before the end of the year, especially if your state allows a state income tax deduction. You can use your annual exclusion amount to contribute up to $17,000 per year to a beneficiary's 529 account gift tax-free. Alternatively, you can make a lump sum contribution of up to $85,000 to a beneficiary's 529 account, and elect to treat it as if it were made evenly over a five-year period, gift tax-free.

Business Owners

  • Remember to consider the Qualified Business Income (QBI) Deduction rules when contemplating contributions to pre-tax and Roth retirement accounts.

  • Consider the long-term and short-term tax implications of deferring or accelerating business expenses into 2023.

  • Remember that some retirement plans need to be in place by 12/31 of the year in order to receive contributions for 2023.


Year-End Financial Planning
Tips & Reminders

 in PDF format


This content is intended to be educational and thought-provoking rather than financial advice.  When we work together in a financial planning engagement, we discuss your unique personal situation and goals.  We examine these factors and many others during our financial planning process to determine appropriate financial strategies for YOU.

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