Over the years I have learned that many people use these last few weeks of the year to pay more attention to taxes and the steps they can take to optimize their tax situation.
The concern is appropriate. For home improvement, keeping track of earnings reports, vacation markets, and your investment mix can limit your energy to monitor changes in tax law.
However, some finance professionals may have limited understanding beyond individual investment strategies.
It is the time to look back and understand where we are today.
We can remember the first day we heard of the lockdown and what it was like when markets responded to a global pandemic. Maybe you have had losses, or maybe you have a positive year. You may even have found that you need to allocate additional funds.
And when you’re retired, or approaching retirement, it can be surprising how many details there are to keep in mind.
You may need to be aware of the contribution restrictions for your IRA – and make sure you take full advantage of them when you can.
You may also need to track excess contributions or minimum required distributions. Many areas require your attention as the cost of a lack of detail can be significant.
In addition, it’s 2020.
Between the national elections, the CARES law, and the COVID-19 pandemic and related stimulus packages, the tax implications of 2020 are likely to require more attention than ever.
If you’re looking for a glimpse into the things to consider, take a look at our tax guide “Tax planning in uncertain times.” The guide will give you some thoughts on how the pandemic and the 2020 elections can affect your tax outlook.
Most importantly, stay tuned.
The end of the year is no time to roll out. Make sure you are on the cutting edge or find an advisor you can trust to guide you through any aspects that may affect your tax position this year.