MARTINEZ: Checklist for tax planning related to year-end investments | Local news


Using this checklist will help make sure you are working towards your financial goals and preparing for the next tax season. Keep in mind that most investment-related strategies to help manage this year’s tax bill need to be implemented by December 31, 2021.

Review your portfolio with your financial advisor to make sure your asset allocation still matches your goals. Market activity may have created a need to rebalance your portfolio by selling some investments and buying others to bring it back to your expected allocation.

Ask your financial advisor for a Realized and Unrealized Gains / Losses report to assess the income and capital gains or losses you may receive this year.

Find out if the 0% capital gains rate may apply in your situation. Add your long-term net capital gains and / or eligible dividends to your other taxable income net of deductions. If the sum is $ 40,400 or less (single filers) or $ 80,800 or less (married / spousal filers), your long-term capital gains and / or eligible dividends may be taxed at 0%. For amounts above these thresholds, capital gains tax brackets of 15% and 20% apply.

Review tax loss selling strategies if you have realized capital gains. If you want to realize a loss but keep your exposure to the stock, remember that November 30, 2021 was the last day to ‘double’ a position (buy additional shares of the investment you want to sell to realize a loss) while avoiding a wash sale.

Meet with your tax advisor to prepare preliminary tax projections and assess whether to accelerate or defer income and expenses.

Determine if any adjustments are needed to your withholding tax or your estimated tax payments.

Make maximum contributions to your employer sponsored retirement account, such as a 401 (k) or 403 (b); if you are contributing to your IRA, the deadline is April 15, 2022.

Make a plan to complete charitable and family donations by the end of the year.

Consider funding a flexible spending account and / or health savings account during your employer’s annual benefit enrollment period, if you qualify. Also check out the FSA balances. Keep in mind that FSAs generally operate on a use-or-loss basis, which means you could lose any money left in the account after the year is up.

Prepare for filing income tax returns by organizing records or receipts for income and expenses.

Wells Fargo Advisors does not undertake to provide legal or tax advice. If legal or tax assistance is required, the services of a competent professional should be sought.

This article was written by / for Wells Fargo Advisors and provided courtesy of Alonso Martinez, Financial Advisor at Valdosta, at (229) 259-7844.

Investment and insurance products are not insured by the FDIC or any federal government agency; not a deposit or other obligation of, or guaranteed by, the bank or any subsidiary of the bank; subject to investment risks, including possible loss of invested capital.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered brokerage and non-bank subsidiary of Wells Fargo & Company.

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