Here Comes the tax man...year-end financial planning tax reminders

Updated: Dec 19, 2019


Disclaimer: The information provided is not intended as tax or legal advice and may not be relied on for purposes of avoiding any federal tax penalties. Individuals are encouraged to seek specific advice from their personal tax or legal counsel.


Taxes?! We have until April to think about taxes, right? Wrong!  It's nearing year end and in addition to planning your New Year's Eve festivities, you should be thinking about your income tax situation.  You can benefit from some serious tax savings but only if you address these items before year end.


To-do's to Consider:


Shift Income & Deductions:

It depends on your personal tax situation, but shifting income or deductions between this year and next may decrease total tax due. If your income will change from one year to the next, you may benefit from the following options:

  1. Increase or delay deductions for this year or next by making additional property tax payments or state income tax payments before year-end.

  2. Push income to the next year.

Other Year End Reminders:

  1. Charitable contributions: Are there charities that are important to you, which you regularly support? If so, making these contributions by year-end may allow you a tax deduction this year instead of next. If you gift to charities regularly, consider donating highly appreciated stock gifts to avoid the taxable gain. Contact us for more information.

  2. Tax-Loss Harvesting: You can sell down stock positions with significant losses to book the tax loss which can offset some taxable income or future gains.

  3. Alternative Minimum Tax (AMT): Are you in AMT? Your tax liability is actually calculated two ways: the standard tax system and the alternative minimum tax You owe whichever is larger. AMT eliminates many deductions, credits and preferential tax treatment of some income. If you are in AMT, contact us or your CPA about other planning items to consider.

  4. Annual Gifting: The annual gifting exclusion for 2017 is $14,000 or $28,000 for married couples. If someone gifts to you, or you make gifts to others, as long as the amount us under these exclusions, you don't need to report them to the IRS. Payments for education expenses or medical expenses are not considered gifts and there are no annual limitations (as long as these payment go directly to the institution).  Payments to college 529s are considered gifts, but can be "front loaded" for five years.  Contact us or your CPA to discuss this strategy.

  5. Inherited IRAs: Did you inherit an IRA? If so, there are distribution requirements for these funds since tax has not been paid on them yet.  If you inherited this IRA recently, note that you must begin to take distributions by December 31 of the year after the year of the original owner’s death Distribution rules for IRAs can be complex, so we highly recommend you seek proper tax advice.

  6. Contributions to IRAs: Traditional IRAs must be established, and contributions must be made by the tax filing deadline. You have until April (without extensions) to contribute to your IRA for the tax year in which your qualifying contribution will apply.

Great news! The Pocketnest app is now available for iOS! Download Pocketnest and get your finances in order—in just 10 minutes a month! No jargony finance-speak, pricey fees or in-person meetings required. Download now!


Have questions? We love your questions... email us at hello@pocketnest.com

  • 70 2
  • 70 4
  • 70 3
google-play-badge.6a248cbe (1).png
apple-store-badge-with-border.e2593564 (

© 2020 pocketnest