Personal Financial Planning Tips for the End of Year 2017Submitted by Reby Advisors | Certified Financial Planners | Danbury, CT on October 20th, 2017
As the year winds down, it is important to make sure that you inform your advisor of any financial transactions that may have taken place throughout the course of 2017 outside of Reby Advisors. An inheritance, sale of property, charitable gifts or significant medical expenses can play an important role in year-end financial planning. Discussing changes of taxable income and deductible expenses from the prior year can make tax time more efficient.
Required Minimum Distributions
Required minimum distributions are the amounts that you must withdraw each year from your traditional IRA, employer-sponsored retirement plan, or taxsheltered annuity. You must begin to take the annual distributions by April 1 of the year following the year in which you reach age 70 ½. You still must take your RMD whether you need the proceeds to live your lifestyle or not. Two options if you don’t need the RMD would be to transfer the RMD to a non-retirement investment account or initiate a gifting program for your loved ones; or another option would be to use the proceeds from the RMD to pay the income tax as part of an IRA to a Roth IRA conversion strategy if applicable.
The best tax tip is to be organized and to be aware of what you need to prepare your return. You should provide your CPA with all the information that is required to prepare and complete an accurate return. You should have a list of questions that you want to ask your CPA. Tax planning during the year, and especially before the year ends, is the most important thing you can to do avoid surprises when you file.
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