December 27, 2019
Year-End Tips on Taxes, Investments, and Planning
To: Clients and friends of Potomac Wealth
From: Gary Partoyan
Please consult a tax professional for advice on
tax-related matters. I am here to guide
you but am not able to give formal tax advice.
Minimum Distributions "RMD" are due by 12/31/19
from IRAs and
401(k)s and some
other retirement accounts
clients are good to go on this now—THANK YOU for working with me in November
and early-December to get it all done!
Ask your tax professional if you are subject to
RMD (usually only if over age 70.5).
Pay your estimated taxes if applicable.
Set your 2020 tax withholding elections with
your Payroll/HR team at work
Harvest gains/losses in taxable investment
accounts, if applicable, by 12/31/19. FEW
clients need to do this; applicable only to taxable accounts.
Hire a tax pro to help with these and other
decisions. Contact me if you want
and similar... contribution limits are $19,500 ($26,000 if age 50+) for 2020,
increased from $19,000/$25,000 for 2019.
Make sure you’re on track to contribute maximum
allowed, or maximum you can afford.
Make sure you contribute at least minimum
necessary to get maximum “free money” (company matching or profit sharing) from
Contribution limits apply to all 401(k) plans
you changed jobs, you new 401(k) may not know how much you contributed to your
old 401(k), so talk to HR/Payroll at new job to try to adjust if necessary.
IRA... contribution limits are $6000 ($7000 if age 50+) for 2020, same s
your tax pro or me about "Roth Conversion" as a way to reduce taxes
SIMPLE IRA contribution limit increased to
$13,500 (from $13,000 in 2019); for age 50+ it’s now $16,500 ($16,000)
Retirement savings target should be ~15% of your
salary (gross pay), but please do an Investment Plan with me to be more clear about
your specific situation.
If you are a business-owner, let's talk. Great opportunities to save more than typical
"employees" using SEP-IRA and/or Individual 401(k) plans.
529 college savings plans
Contributions for this year are due by 12/31 in
most states, but there are some exceptions.
Contributions may be deductible, so check with
the 529 Plan and your tax advisor.
you have cash set aside already, try to put it into a 529 before 12/31 so you
can get any possible state income tax deductions.
Anyone can contribute to a 529. But do NOT make check payable to the child when
giving a gift. Best to contact the 529
plan for most efficient way to write the check.
Ask your tax pro or me, or click
for more about 529 plans.
Most employers offering healthcare insurance and
other benefits have a schedule for renewing or changing for next year, aka
Please make sure your benefits are the way you
want for the coming year.
Consider child care benefits offered.
Consider tax advantages of using a Healthcare
Savings Account (HSA).
Contact HR/Benefits for help.
Know your risk tolerance profile and asset
allocation targets. I can help you
Is your portfolio Conservative, Moderate,
Aggressive, or somewhere in-between? Is
that suitable for your risk tolerance?
Are the investments high-quality, or do you need
to use better mutual funds or ETFs?
Change your portfolios accordingly.
Flexible Spending Accounts (FSA) and Healthcare
Savings Accounts (HSA) can provide many advantages. Find out if they are available through
employer or otherwise.
Save your receipts/confirmations for charitable
contributions, in case they are needed.
Designations on your IRAs, 401(k)s, insurance policies,
annuities, and other retirement plans out-rank what you specify in your
Will and/or Trust, so be sure to synchronize your accounts with your estate
your tax and estate planning advisors if you have complexities such as blended
families and multiple marriages. I can
help you figure out what to ask those pros.
How To Be Financially
My most "successful" clients are on
track to meet their personal goals and prepared for emergencies, regardless of
income or size of nest egg.
enough, investing prudently, insured for disability and death.
Do an Investment Plan with me—it's worth the
extra time/effort, and it's included in your fee.
Schedule a call or meeting for January.
Be well and enjoy the holiday season.
Thank you for your business!