2022 Year-End Checklist

Karen Van Voorhis, CFP |

As we head into the end of this calendar year, here are a few items to consider.

  • If you have losses in taxable accounts: Consider selling holdings that are at a loss; these are the silver linings of a down market. Up to $3,000 in losses can be taken against current income, and losses can also be netted against each year’s capital gains and rolled into future years if they are not fully used in year one.
  • If you have gains in taxable accounts: Consider in-kind gifts to charity or to a donor-advised fund (DAF).
  • If you have a health savings account (HSA): Be sure you are maxing out your 2022 annual contributions. Your HSA contributions are fully deductible, regardless of your income or tax bracket.
  • If you expect your income (and therefore your tax bracket) to increase next year and beyond: Consider tax activities that “fill up” lower tax brackets now (for example, Roth contributions and Roth conversions), knowing that these activities would otherwise cost you more later.
  • If you have to take RMDs that you don’t otherwise need: Consider making qualified charitable distributions (QCDs), gifts directly from your IRA to charity. QCDs count toward your annual RMD amount, and additionally aren’t considered to be taxable withdrawals.
  • If you are planning to make 529 plan contributions: Consider making present-year contributions, which, depending on where you live and the plan you use, can result in a state tax deduction for you.
  • If you have room to contribute more to your 401k or 403b plan: Consider increasing your paycheck withholdings through year-end, to lower taxable income (and to boost ongoing savings) this year.
  • If you are age 72 or older and have multiple IRAs: Know that you are allowed to aggregate this year’s required minimum distributions (RMDs), pulling the total from one account instead of multiple account.
  • If you have certain employee benefits: Make a plan to use up benefits that will expire before year-end, such as flex spending account (FSA) balances or vacation days that won’t roll over.
  • If you are a business owner: Try to incur upcoming expenses this year, and push off income until next year, helping to lower 2022’s tax burden.

Many year-end activities are tax-centric or are recommended as part of a particular tax strategy; reach out to us or your tax preparer if you have questions about these or other year-end techniques.