It’s officially the season for making a list and checking it twice—but the list that we’ve got for you today is your year-end tax deadlines. This is the first year that the new 2018 tax changes are in effect, so some of these financial actions may be more important for your family’s tax situation than in the past. In the midst of the holiday blur, here is a list of some financial actions to make sure you’re ending the 2018 year strong:
Required Minimum Distribution (RMD): If you are 70½ or older, you must withdraw a RMD from your IRA and/or your Qualified Retirement Plan by the last day of the year. Most institutions require completed distribution forms by mid-December. If you just turned 70½ during this calendar year, you may postpone withdrawing until April 1, 2019. Just realize you will have two RMDs amounts as income in 2019.
Roth IRA Conversion: If you are considering converting your traditional IRAs to Roth IRAs to take advantage of the lower federal income tax rates with the Tax Cuts and Jobs Act (TCJA), submit a Roth Conversion Form to your financial institution right away. Conversions must be completed by December 31 to count for the 2018 tax year. The best candidates for Roth conversions are individuals who will stay in the same or higher tax bracket during retirement. If you’re confused about the conversion process or wonder if it would work for you, this article is a great resource.
Charitable Donations: If you would like to make charitable donations, tell both the charity who is receiving the assets and your financial institution whether they can share your information with the recipient. Charitable gifts in whatever form—mutual funds, cash, stocks—must be received by the non-profit by December 31 to count for the 2018 tax year. Note, you can send a check and have the US Mail postmark count as receipt, yet it will probably take several business days to transfer shares of stock to your favorite charity. Keep these timeframes top of mind.
In the frenzy of your giving season, remember to give yourself the gift of financial peace of mind by checking twice on your financial action plan. Doing so will set you up for success in tax season and allow you to enjoy the most wonderful time of the year.