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Q4 To-Do List: Close 2018 successfully

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The last quarter of the year brings with it a healthy number of to-do items and financial considerations.

This year, the list is unusually long due in part to the Tax Cuts and Jobs Act of 2017 (TCJA). By working on this list now, you’ll be able to make the decisions or adjustments needed to close 2018 successfully and position yourself optimally for 2019.

So, take a look at the following list of reminders, opportunities, and considerations!


Review your tax situation.

Nearly every taxpayer will experience changes as a result of TCJA. Planning ahead and reviewing your unique situation before the end of the year is a smart strategy.

Tax Penalties: Nearly 10 million peopled were assessed a penalty for underpayment of taxes last year. Don’t be one of them next year! To avoid penalties for underpayment of taxes, evaluate your tax withholding. The IRS has provided a calculator, which can be found here: irs.gov/individuals/irs-withholding-calculator

State and Local Tax Deduction: Have you routinely itemized your federal tax deductions? For tax year 2018, you may decide to take the standard deduction instead. The state and local tax deduction (SALT) is now capped at $10,000. The standard deduction is now $12,000 ($24,000 for a married couple). So, your incentive to take the SALT deduction might be gone and it may impact your taxes.

Charitable Giving: TCJA created confusion for many people around the issue of charitable giving. If you routinely give to charities and are concerned about the impact of the new tax law, or you’re considering larger gifts, please call soon. Strategies exist to ensure the best benefit for the charity you support and for your tax situation.


You still have time to reach retirement savings goals.

With approximately three months left in the year, you have plenty of time to make a meaningful adjustment.

401(k)s, 403(b)s, and 457s: Each of these employee retirement plans have 2018 contribution limits of $18,500 for those under age 50 and $24,500 for those over age 50. December 31 is the deadline for employee contributions.

IRAs: The 2018 limits are $5,500 for IRA owners under age 50 and $6,500 for IRA owners who will be 50 or older this year. These limits apply to both Roth and traditional IRAs. Keep in mind that you can make IRA contributions for 2018 until April 15, 2019 (the 2018 federal income tax deadline).

SIMPLE IRAs and SEP-IRAs for business owners and the self-employed: In 2018, the contribution limit for a SIMPLE IRA is $12,500; those who will be 50 or older this year may contribute up to $15,500. The annual contribution limit on a SEP-IRA is the lower of $55,000 or 25% of the business owner’s net self-employment income.

Roth Conversions: Roth conversions allow taxable retirement funds to be turned into tax-free funds. The strategy and process can be complicated, but when used appropriately, the reward can be significant.



Flexible Spending Accounts: TCJA changed the rules for FSA. The IRS now permits an employer to let an employee carry up to $500 in FSA funds forward into the next calendar year. Alternately, the employer can allow the FSA accountholder extra time to use FSA funds from the prior calendar year (up to 2½ months). Companies do not have to allow either choice, however. If no grace period or carry-forward is permitted at your workplace, you need to spend 100% of your FSA funds in 2018, as you will lose those FSA dollars when 2019 begins.

Health Savings Accounts (HSAs): People enrolled in high-deductible health plans (HDHPs) are allowed to create a pool of money that can be applied to health care expenses. HSA contributions are tax deductible and grow tax free. When used for qualified healthcare expenses, distributions are not taxed.  In 2018, an individual can direct $3,450 into an HSA. The family limit is $6,900. An additional catch-up contribution of $1,000 is allowed for HSA owners aged 55 and older.

The Medicare Open Enrollment period is from October 15, 2018 – December 7, 2018. Health and drug plans change every year. Review the materials you receive from your plan to ensure that it will meet your needs for the coming year. During open enrollment, visit Medicare.gov for plan information or to compare plans.


A few good reminders:

Trusted Contact: Is there someone (a trusted family member or friend) your financial advisor can communicate with on your behalf? In response to unprecedented levels of fraud, it helps to know who your advisor can speak with if there is concern about fraud or financial exploitation or if they suspect that someone is suffering notable cognitive decline. Talk to your advisor about a plan that protects you.

Credit Reports: If you haven’t done so yet this year, check your credit report. Remember, you are entitled to one free credit report per year from each of the big three agencies: Experian, TransUnion, and Equifax. Historically, asking these bureaus to freeze your credit file in case of suspicious activity has incurred a fee. Now, you will be able to request a freeze from all three at no charge, thanks to a change in federal law.

Beneficiary Designations: If you’ve married, divorced, separated from a spouse, had a child, suffered the death of a loved one, or experienced other significant changes, you should review beneficiary designations on investment and bank accounts and on life insurance policies. Beneficiary designations often take priority over bequests made in a will or trust.

File the FAFSA if your child is off to college: The Free Application for Federal Student Aid can be filed starting October 1, 2018. The FAFSA is one situation in which the early bird may indeed get the worm!

529 College Plans: If you’re always looking for good holiday gift ideas, consider contributing to a loved one’s college fund. Did you know that you may be able to use up to $10,000 from 529 college savings plans to support your child’s high school education? The rules changed in 2018.

Required Minimum Distributions (RMDs): The deadline for removing RMDs from IRAs and inherited IRAs is December 31. Funds that should have been distributed but remain in the account after the deadline are subject to a 50% penalty. Ouch! If you’ve reached age 70½ in 2018 or are the owner of an inherited IRA, you may be subject to RMDs.



Helping our clients manage their investments and financial life is a tremendous pleasure and an honor. If there are areas of your finances in which you are struggling, or places where we can be helpful, please contact Wisdom Wealth Strategies at wisdom@wisdomws.com.



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Andrea L. Blackwelder, CFP®, ChFC, CDFA® and Joseph D. Clemens, CFP®, EA are the founders and partners of Wisdom Wealth Strategies. Their shared passion is simple: to bring financial empowerment, understanding, and peace-of mind to people who wish to improve their financial future, build wealth for their families, and achieve financial independence. Click here to find out more about how you can work with the Denver Financial Advisors at Wisdom Wealth Strategies.


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