2019 Planning Ideas – 4
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
Tax payments
Review your withholding and/or quarterly tax payments:
• For employees, review the IRS withholding calculator at irs.gov to determine if you need to make any adjustments to how much money your employer withholds from your paycheck due to the recent tax law changes.
• For business owners, a new deduction of up to 20% of qualified business income may apply. Talk with your tax advisor to determine your eligibility foe this deduction and its impact on any remaining estimated tax payments you may need to make.
• Review with your tax advisor the need for adjustments to your state income tax payments as well. Although your tax situation may have improved with the federal tax law changes, not all states are adopting the federal changes.
Take Action: Review these year-end planning activities.
Now
Ask your Financial Advisor for a realized and unrealized gain/loss report to assess the income and/or capital gains you should expect this year.
Review your portfolio with your Financial Advisor to help ensure your allocation still aligns with your goals.
Create or add your education saving program.
Determine whether the 0% capital gains rate will apply to your situation this year.
Meet with your tax advisor to prepare preliminary tax projections and evaluate whether to defer income or accelerate expenses.
Review tax-loss selling strategies if you have capital gains but wish to keep exposure to a depreciated sector or security. Remember, the last day to double up a position to help avoid a wash sale is November 30, 2019.
Determine if any adjustments are needed to tax withholding or estimated payments due to recent tax law changes.
Soon
Develop a plan to complete charitable and family member gifts by year-end.
If you are on a Medicare, review your Medicare Part D choices; the open window for enrolling or changing plans is October 15 to December 7.
Consider funding an FSA and/or HSA during your employer’s annual benefits enrollment period.
If you have children going to college, be sure to file financial aid forms as early as October 1, 2019.
Review your beneficiary designations and make any necessary adjustments due to life changes (i.e., marriages, divorce, birth of child/grandchild, death etc.
Review your insurance coverage to make sure it is adequate for your needs.
Before December 31
Make maximum contributions to your employer retirement accounts; if contributing to your employer retirement accounts; if contributing to your IRA, the deadline is April 15, 2020.
When selling securities you own, remember the trade date, not the settlement date, determines the year of the sale and recognition of any gain or loss in most situations. Trades executed on or before December 31, 2019 will be taxable events in 2019.
Take RMDs if age 70 ½ or older; discuss with your tax advisor the suitability of qualified charitable distributions (QCDs).
If you are paying advisory fees on your IRA accounts, reevaluate whether to have the fees paid from the IRA or from outside account, since beginning in 2019 advisory fees are no longer deductible.
Complete any Roth IRA conversions.
Make gifts to individuals or charities. The annual gift tax exclusion amount for 2020 gifts to individuals is $15,000.
If you own company-granted stock options, determine whether now is the time to exercise or disqualify them.
If you will reach full retirement age for Social Security or plan to retire in 2019, make an appointment to talk with your local Social Security Administration office in early 2020.
Take precautions now to avoid tax-related identity theft; ask you Financial Advisor for a copy of our “Help Avoid Tax-Related Identity Theft”report.
Prepare for filing tax returns by organizing records or receipts for income and expenses.
Not sure where to start? Turn to your advisors today.
Schedule an appointment with your tax professional to discuss your situation and review your 2019 tax projection.
Follow-up with your Financial Advisor to evaluate your portfolio strategies and any investment changes that may help lessen your 2019 tax bill. If it appears you’ll be in one of the upper tax brackets, review some of the potential strategies presented in our report, “Tax Strategies for Higher-income Taxpayers”
Go beyond tax planning and create or update your Envision investment plan profile. With an Envision plan, you can easily make adjustments to account for tax planning considerations or changes in your life (birth, death, marriages divorces, etc.). If you are nearing retirement, your Financial Advisor can also include income projections using the Income Center.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
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