As we get close to the end of 2015, there are a few final tasks you need to check off of your to-do list for the year:
- Max out retirement account contributions
- Consider harvesting losses for tax purposes
- Take your RMD
Whether you have a 401(k), 403(b), 457, or other workplace retirement account, now is your final opportunity to make contributions for 2015. While you still have until April to make 2015 contributions to an Individual Retirement Account, don’t give up those extra months of potential growth by waiting until the last minute.
If you’re worried about your tax burden for 2015, it might be worth taking a look at your taxable investment accounts and selling losers to offset taxable gains. Taxes are just one piece of your overall financial picture, so you definitely want to consult a qualified tax expert before making any financial decisions. If you need tax advice before the end of the year, let us know so that we can recommend someone from our network of professionals.
If you’re over age 70-1/2, you’re required to take minimum distributions from your Traditional IRA and certain qualified retirement accounts. If you fail to take your minimum distribution by December 31, you may face a penalty of 50% of the RMD.
In prior years, IRA owners were able to make charitable donations using their RMDs, lowering their tax burden and contributing to a good cause. As of this writing, Congress has not yet renewed charitable RMD provisions for 2015; however, they may do so in the final days of the year. In 2014, taxpayers had only a few days to respond. If you would like to donate your RMD to a qualified charity, make sure you’re ready to act quickly before the end of the year.