It’s hard to believe that 2020 is almost over.

The GMAG team is here to provide peace of mind through a collaborative approach to financial planning and investment advice. The GMAG Year-End Checklist will prepare you to enter the new year with confidence. We’re ready.


1 Accelerate Deductions

Pay down any accrued margin interest before year-end. Consider making capital acquisitions and paying business expenses before year-end to take advantage of deductions.

2. Make contributions or withdrawals from retirement plans

Maximize contributions to employer-sponsored retirement plans such as 401(k)s to defer income. Required minimum distributions are waived for 2020 pursuant to the CARES Act. Evaluate the benefits of a Roth IRA conversion. Consider creating and funding self-employed retirement plans.

3. Maximize education planning

Consider establishing or contributing to a 529 college saving plan. Depending on where you live you may be eligible for a state income tax deduction for your contribution. Make tuition payments directly to the educational institution on behalf of children and grandchildren. Tuition payments made directly to the institution do not c4ount toward your annual and lifetime gifting exclusions.

4. Make annual gifts

You can make tax-free gifts of up to $15,000 per person for individuals or $30,000 for married couples per calendar year. Consider using your lifetime exemption. Contribute to traditional or Roth IRAs for children or grandchildren who have enough earned income to d5o so but are not funding IRAs on their own.

5. Donate to charity

Make gifts to a charity before year-end to receive a deduction. Be mindful of your income, because non-cash gifts are generally limited to 30 percent of AGI. For 2020, cash gifts will not be limited based on AGI. Establish or contribute to a donor-advised fund and receive an immediate tax deduction and the flexibility to send funds to a charity at a later date. Consider donations of appreciated securities to avoid capital gains tax.

6. Harvest tax losses

Realize capital losses to offset capital gains. Investments that are currently at a loss can be sold and replaced with a different investment of similar value. The two can be swapped back after 30 days to avoid the “Wash Sale” rule. Up to $3,000 of net capital losses in a calendar year can be used to offset your other income. Any additional capital losses can be carried forward to future tax years.

7. Prepare year-end tax projections

Have your CPA prepare a tax projection to assess your tax situation and determine how you can apply these strategies this year. Tax projections can help avoid the imposition of interest and penalties on underpaid tax liabilities. Consider the impact of AMT on your overall tax planning. You may consider deferring deductions to next year if the deductible tax benefits may be greater.

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