This article was originally published in AZ Big Media

By Urban Adams

Fall is here and favored by so many for good reason. From cooler temperatures, football and foliage to holidays and all-things pumpkin… For financial advisors and their clients, fall signals end of year planning and all-things financial. It’s no coincidence Financial Planning Month is in October. It’s the perfect time to take an inventory of your financial house to maximize tax efficiency and set the stage for financial health in the New Year.

As part of my quarterly review schedule with clients, earlier this month I sent them a detailed Q4 checklist of the financial issues they should consider before the end of the year. It’s the most exhaustive of the previous quarters’ checklists, ranging from tax planning and retirement savings to cash flow, asset and debt, estate and insurance planning issues.

Client responses to my email were immediate. Various concerns, not all having to do with investing, included how best to handle an upcoming car lease expiration and pay for expensive dental work (surprise!) from a non-qualified (i.e., taxable) account. Suffice to say, my calendar is filled between now and Thanksgiving with year-end planning meetings with clients.

During this critical time of year, we’ll address clients’ immediate financial concerns as well as the decisions they’re faced with that have a direct impact on tax planning. Quality tax planning advice from your advisor is imperative. Whether you’re a business owner or self-employed, a W-2 employee, widow(er), retiree or approaching retirement, there are several timely considerations to make informed decisions, specific to your unique financial situation, simple to complex.

If you’re working with a financial advisor (or thinking about it), here are five valuable end of year considerations your advisor should be asking you:

• Are you actively seeking tax loss harvesting opportunities? For investors, these are ways to realize losses in a portfolio that can be used to offset gains elsewhere. For example, you may hold securities that have decreased in value this year in a non-qualified account. You may sell those securities to realize the “loss” to offset any gains realized during the year or write off up to $3,000 against ordinary income.
• What are your plans for year-end gifting? For those who are charitably inclined, now’s the time to determine your gifting strategy. Whether donating to your favorite cause(s) and/or gifting to a family member up to $17,000, the per year/per doner gift tax exclusion limit.
• Are you on track to take your required minimum distribution (RMD)? Though you may be age 73 or over and subject to taking an RMD, it’s important to remember that you don’t have to spend it. You just need to make sure you satisfy the required minimum distribution before year end. It’s sometimes a good idea to have taxes withheld when taking the distribution to avoid any tax liability surprises in April, too.
• Will you have a balance in your Flexible Spending Account (FSA) or Health Savings Account (HSA)? Consider using any remaining funds before year-end and make sure you’re optimizing your contributions in 2024. While an FSA doesn’t generally rollover, be sure to check the options your employer may offer.
• Do you have additional opportunities to improve your tax situation? This could include increasing your contribution to your 401(k) or contributing to your children’s or grandchildren’s 529 college savings plans. If you own a business or are self-employed, review your business financials, i.e., anticipated earnings, expenses, etc. and look for ways to leverage retirement savings options available to you.

 Discussing these considerations with your advisor will not only help to affect your tax liability in the near term, but also to maximize your retirement savings and investment portfolio, helping to meet your financial goals in the long term.

Urban Adams is an Investment Advisor Representative with Dynamic Wealth Advisors.

All investment advisory services are offered through Dynamic Wealth Advisors. Urban Adams also offers insurance brokering services, this is considered an outside business activity from Dynamic Wealth Advisors and is separate and apart from Mr. Adams’s activities as an investment advisor representative of Dynamic Wealth Advisors. For more information, visit dynamicwealthadvisors.com.

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