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An End of Year Financial Checklist

Personal Finance

As 2018 draws to a close, many of us are occupied with holiday planning, travel, and getting ready for the New Year. While December is a hectic time for many, it is important to take the time to get your financial house in order and be prepared for 2019.


Here are a few checklist items to consider in creating your year-end financial plan.


  • Calculate and update your retirement expenses. Considerations would include where you plan to live, estimates of your post-retirement expenses (commuting costs, childcare, college debt, and mortgages may be replaced by house and yard work costs, community association fees and medical expenses). Be sure to include the impact of inflation and your time in retirement as part of your assessment.
  • Sources of income. Determine and calculate your sources of income that you will receive during your retirement. The coverage of your retirement expenses can come from multiple sources, including guaranteed income such as pension payments or social security. Individual retirement accounts, such as the traditional or Roth IRA and employer-sponsored accounts, such as the 401(k) or 403(b) will often serve as a major source of income for many retirees and the importance of contributing early and significantly cannot be stressed enough. Other sources of retirement income can come from other brokerage accounts, savings, rent and royalty streams, inheritance and annuities or some sort of insurance product. Often, retirees will go back to work to provide enough income to cover the spread between income and expenses.
  • Review your retirement savings plans. Individual retirement plans and employer-sponsored plans described above offer tax-advantaged ways to save for retirement. You should consider setting up and maximizing your contributions to accounts covered by these plans. In many cases, employers will match your contributions up to a set limit for employer-sponsored plans. Additionally, for individual plans, you should determine if a Roth or traditional IRA is best for you. In many cases, converting a traditional IRA to a Roth IRA makes sense as the accumulated tax benefits down the road may outweigh the upfront tax deferment of the former. Now is the time to look at your annual contributions to your retirement accounts.


  • Take stock of your investments. Do you have the appropriate asset allocation in today’s economy and market environment? Is it time to rebalance your portfolio?
  • Are you happy with your current investments and whether those investments will meet your long-term goals?
  • What is your current tax liability this year with regards to your investments? What do your short and long-term gains look like this year? How much dividend and interest income did you generate this year?
  • Should you deploy a tax-harvesting strategy by selling losing investments to offset capital gains?
  • Review your broker and advisor? Are they meeting your current investment needs? Do they keep in touch with you? Are they accessible and responsive? Do they understand and accommodate your unique financial situation?

Tax Planning:

In my blog The Tax Cuts and Jobs Act: How It will Impact Individuals and Businesses I highlight some of the key points from the newly implemented tax legislation of 2017 that will affect individuals and businesses. These are some of the items to consider.

  • Change to Marginal Tax Brackets: Pay attention to your marginal tax rate brackets as they have changed in 2018 after the TCJA reform. For most, the rates have been reduced but so have the inflation rate adjustments so that people can move into higher tax brackets more quickly as their income increases. If you are on the threshold of a tax bracket, consider deferring income into next year or accelerating deductions into this year to help reduce your tax exposure.
  • Standard Deductions and Personal Exemptions: As highlighted from the table in my blog, standard deductions have increased dramatically from 2017 and personal exemptions have been eliminated.
  • Education: For those paying for an education, there are potential tax deductions and credits that can help lower the tax bill. These include deductions on student loan interest, as well as credits for tuition, books and school fees, such as the American Opportunity tax credit and lifetime learning credit. Also, 529 plans can now be used for elementary and secondary education tuition expenses, capped at $10,000 per beneficiary per year. If you are a school teacher, you can take a deduction on expenses spent on classroom supplies (capped at $250).
  • Children and Dependents: For those with children, there is the child and dependent care credit, the child tax credit, the earned income credit and the adoption credit that may be applicable in reducing your tax bill on a dollar-for-dollar basis.
  • Medical Expenses: The Federal threshold for medical expenses that are eligible for a deduction have been reduced from 10% of adjusted gross income to 7.5%. Your state might have different thresholds. The requirement for insurance under the Affordable Care Act is still enforced for 2018 but ends in 2019. Recently, a Texas Federal judge ruled the Affordable Care Act is unconstitutional but that will very likely be challenged in the courts. Contributions to Health Savings Accounts (HSAs) are tax-deductible and withdrawals are tax-free for those who use them for qualified medical expenses.
  • Real Estate: Some key deductions in this area, such as mortgage interest deductions, property tax deductions, home equity deductions, deductions on interest for second homes, and moving expenses, have been altered under the new tax reform legislation. Some notable items are the cap on mortgage debt for primary homes purchased after December 15th, 2017 in which the deductible mortgage interest has been reduced from $1million to $750,000. Additionally, the deduction for state and local income tax, sales tax and PROPERTY taxes are capped at $10,000. Furthermore, deductions on interest from home equity debt have become much more restrictive, as have deductions for moving expenses.
  • Investments: Note that 401(k) maximum contributions set by the IRS are capped at $18,500 for 2018; this increases to $24,500 if you are 50 or older. Keep in mind that your employer can make contributions on top of that. You can also make contributions to traditional or Roth IRAs subject to IRS limitations related adjusted gross income (AGI). If you’re turning 70½, you’ll need to take into consideration your required minimum distributions (RMDs) from your traditional IRA and 401(k) plans.
  • Businesses: Businesses are a major beneficiary from tax reform with the corporate tax rate being reduced from a maximum tax rate of 35% to a 21% flat rate. Furthermore, for those who own a pass-through business, there is a 20% deduction for qualified business income, subject to income thresholds. As someone who is a business owner or self-employed, there are some major tax deductions that you are entitled to and you should speak with your tax accountant to identify and calculate these deductions.
  • Charitable Contributions: If you are considering giving, now is the time to do it as you minimize the time between your donation and the tax deduction you can receive from that donation. Additionally, now is the time of year for giving. Just remember to document your donations.

Other Considerations:

In addition to the items related to retirement, investments, and taxes, consider the following items as part of your proactive financial planning:

  • Make sure you use the funds that you’ve contributed to your flexible spending accounts. They may be subject to a grace or carryover period but keep tabs on them. Also, make sure you fund them for next year, based on anticipated expenses.
  • Adjust your withholding tax to cover any anticipated tax shortfalls or to generate more income if you are overpaying your taxes. Be sure to consider any anticipated adjustments in your income, as well as estimated tax deductions.
  • Review your estate documents. For those with trusts, make sure your trust funding is intact and that you have the appropriate beneficiary designations (this applies to your retirement accounts as well). Evaluate your trustee and agent appointments, as well as the provisions for your powers of attorney and health care directives. Make sure that you have a full understanding of these documents.
  • Automate your personal finance. There are plenty of money management and personal finance software tools out there and you should seriously consider using one to improve the tracking of your personal finances and to simplify your life. Quicken has been the long-run standard for personal finance software but there are numerous alternatives sprouting up, including Personal Capital, Mint, Tiller, YNAB, CountAbout, and GnuCash, amongst others.
  • It is a good idea to get a credit report to check for any suspicious activity and the possibility of identity theft. The major credit rating agencies (Equifax, Experian, and TransUnion) are required to provide you with a free copy of your credit report once a year at your request. Take advantage of this opportunity.
  • Finally, get advice from professionals. While this list may be a good start, it is not exhaustive and there may be a myriad of financial and tax issues that are specific to you.

Best wishes for a Happy Holiday Season and for a prosperous 2019!

This material has been provided for general purposes only and does not constitute financial, legal or tax advice. We try to make sure that this information is accurate and helpful, we strongly encourage you to consult with a tax professional, financial advisor and/or lawyer.

All written content on this site is for information purposes only. Opinions expressed herein are solely those of QMI Capital Management LLC unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.