End-of-the-Year Money Moves in 2022

End-of-the-Year Money Moves in 2022

As the year-end of 2022 approaches, we want to help you spot planning opportunities that are very time-sensitive. For our clients, we regularly do this type of planning but it never hurts to have a yearly refresher.

Perhaps you…

• Are considering making 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.

Whatever the case may be, the end of the year is an important time for financial planning.

Tracking numerous deadlines and avoiding missed planning opportunities can be challenging during these busy months. To help ensure that you remain on track, we have a checklist that outlines 18 time-sensitive considerations to guide your end-of-year review and tee up any adjustments for the coming year:

Checklist: End-of-the-Year Money Moves in 2022

Feel free to share this checklist with anyone who may benefit from it.

While the checklist can help you spot good ways to identify all the different opportunities to consider, we are always available to meet with clients to discuss financial goals, and to identify what the best opportunities are.

What has changed for you in 2022?

For some, this year has been as complicated as learning a new dance. Did you start a new job or leave a job behind? That’s one step. Did you retire? There’s another step. If notable changes took place in your personal or professional life, then you may want to review your finances before this year ends and 2023 begins.

Even if your 2022 has been relatively uneventful, the end of the year is still an excellent time to get cracking and see where you can manage/improve your overall personal finances.

Keep in mind that this article is for informational purposes only and is not a replacement for real-life advice. Please consult your tax, legal and accounting professionals before modifying your tax strategy.

Did you engage in tax-loss harvesting?

That’s the practice of taking capital losses (selling securities for less than what you first paid for them) to manage capital gains. You might want to consider this move, but it should be made with the guidance of a financial advisor you trust.¹

In fact, you could even take it a step further. Consider that up to $3,000 of capital losses in excess of capital gains can be deducted from ordinary income, and any remaining capital losses above that amount can be carried forward to offset capital gains in upcoming years.¹

For our clients, we engage in tax-loss harvesting on a regular basis as opportunities arise.

Do you want to itemize deductions?

You may want to take the standard deduction for the 2022 tax year, which has risen to $12,950 for single filers and $25,900 for joint. If you think it might be better for you to itemize, now would be a good time to gather the receipts and assorted paperwork.²

Are you thinking of gifting?

How about donating to a qualified charity or non-profit organization before 2022 ends? Your gift may qualify as a tax deduction. For some gifts, you may be required to itemize deductions using Schedule A.³

While we’re on the topic of 2022 year-end moves, why not take a moment to review a portion of your estate strategy? Specifically, take a look at your beneficiary designations. If you haven’t reviewed these designations for some time, double-check to see that these assets are structured to go where you want them to go in the event that you pass away. Lastly, look at your will to make sure it is still valid and up-to-date.

Check on the amount you have withheld. If you discover that you have withheld too little on your W-4 form so far, you may need to adjust this withholding before the year ends.

Before you ring in the New Year…

New Year’s Eve may put you in a dancing mood, eager to say goodbye to the old year and welcome 2023. Before you put on your dancing shoes, though, consider speaking with your financial advisor or tax professional. Do it now, rather than in February or March. Small end-of-year moves might help you improve your short-term and long-term financial situation.