Fall Is When Good Planning Starts
The fourth quarter arrives quickly, and the families and business owners best positioned heading into the new year are the ones who start thinking about it now. A few items worth having on your radar:
Required Minimum Distributions
If you are 73 or older, your RMD needs to be taken by December 31. Missing that deadline carries a steep penalty. If you have not taken yours yet, or you are unsure of the amount, let us get it squared away now rather than in a December rush.
Qualified Charitable Distributions
If you are charitably inclined and subject to RMDs, a QCD allows you to send money directly from your IRA to a qualifying charity. It can count toward your RMD and keep the distribution out of your taxable income, which makes it a useful planning tool for the right person.
Roth Conversions
With the end of the year approaching, it is a good time to evaluate whether converting a portion of your traditional IRA or 401(k) to a Roth makes sense for you. Depending on where your income lands this year, there may be a window to do it at a lower tax cost than in future years.
Gains and Losses
If you hold positions that have run up significantly, it may be worth reviewing whether realizing some of those gains fits your overall tax picture. If you hold positions at a loss, harvesting before year end can offset gains elsewhere in the portfolio.
Business Owner Year-end Moves
If you own a business, fall is the time to review retirement plan contributions, consider whether a cash balance plan or profit sharing addition makes sense, and confirm that your entity structure is still working in your favor before the calendar turns.
Coordination with Your Tax Professional
We are also reaching out proactively to our clients' CPAs and tax professionals so everyone is aligned before December. Decisions made between now and year end often carry real tax consequences, and we believe financial planning and tax planning belong in the same conversation rather than separate silos. If you have a CPA and have not recently connected your investments to your tax picture, that is something we would like to help facilitate.
None of these are one-size-fits-all decisions. They are conversations worth having before December. If any of this applies to your situation and we have not talked it through yet, reach out and let us set aside some time.
Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser, doing business as Middlebrook Wealth. Securities offered through NewEdge Securities, LLC, Member FINRA/SIPC. NewEdge Advisors, LLC and NewEdge Securities, LLC are wholly owned subsidiaries of NewEdge Capital Group, LLC. Middlebrook Wealth does not provide tax or legal advice. Therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation.
