Four Tips for End-of-Year Tax-Planning - Adviser Investments

Four Tips for End-of-Year Tax-Planning

December 23, 2021

piles of coins

Mistletoe and merrymaking mean the year is nearly over. With that in mind, we have four last-minute tax tips for you to consider before the ball dips and the calendar flips to 2022.

  1. Take advantage of charitable deductions: If you’re looking for ways to lower your 2021 tax bill, charitable contributions are a popular choice for stacking up deductions. Click here for our podcast on the topic, and read our discussions on “bunching” contributions as well as other more advanced charitable giving strategies. And remember that a gift of appreciated stock or fund shares goes further (for you) than cash.
  2. “Harvest” your losses: Losing money is never fun, but there’s a silver lining when you can sell an investment for less than you paid for it—a lower tax bill. You can use the losses to offset the gains you’d otherwise owe taxes on from other parts of your portfolio. And if your overall losses are greater than your gains, you can apply up to $3,000 against your ordinary income for the year. If you have losses beyond that, they will be carried forward to future years. Plus, if you wait 30 days, you can choose to buy back the investment you sold at a loss.
  3. Contribute to retirement accounts: Review what you’ve contributed to your retirement accounts this year—think 401(k)s, traditional IRAs, Roth IRAs, SEP IRAs and health savings accounts (HSAs). If you haven’t hit your limits and have cash available, now is your chance to potentially minimize your tax bill while investing for your retirement. Use our handy reference guide on 2021 contribution limits (and a bevy of other key financial data) to inform your year-end financial plans.
  4. Use your flexible spending account (FSA): If you have one, check the balance of your FSA. Pre-tax dollars contributed for health care expenses do not roll over every year—use it or lose it. Confirm your deadline for spending and start strategizing how to use that cash. What medical supplies can you stock up on? Do you have any receipts from doctor appointments that you can submit for reimbursement?

Tax-planning varies from situation to situation—and it’s cloaked in jargon and acronyms—so be sure to talk with your Adviser Investments wealth management team if you have questions. As The Planner You Can Talk To, we’re here for you.


This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.

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Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional or licensed insurance professional regarding your specific legal or tax situation, or insurance needs.

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