2022 Year End Financial Best Practices

As we head into the holiday season we hope all of you will take a well-deserved respite in front of fireplaces, flanked with Pumpkin pie, and Hot Toddy’s. We wanted to provide a few last end of year items to be thinking about (while there is still time to implement and to take advantage of possible tax implications).

• Giving to a non-profit? (or tithing)

  • Consider a Donor Advised Funds.

  • Easy to set up.

  • You can move appreciated stock into the account (removing the tax liability from your side)

  • Take the entire deduction in the year you fund the account => allowing you to give to non-profits from this account when you’re ready

• Gifting

  • Annual gift tax exclusion for 2022 is $16,000

    • This means you can give any number of people up to $16,000 without incurring a taxable gift

    • Spouses can gift up to $32,000 (gift splitting) to any individual

• 401(k) Contributions

  • $20,500 to max out your 401(k) contribution in 2022 (if under 50)

  • If over 50, you get a “catch up” contribution of $6,500 – making your max availability $27,000 total

• IRA Contributions

  • $6,000 to max out in 2022

  • $1,000 “catch-up” if you’re over 50 – for a $7,000 total contribution

• Did you turn 72 this year?

  • Let’s make sure we’re talking

• Company Stock

  • Do you have company stock to exercise?

  • Stock prices have been hit hard the last few months, this is the ideal time to look at exercising stock!

  • **Exercising is NOT selling. It means starting your capital gains clock.

• Bonus – are you expecting one?!

  • **If you have the option to defer into your 401(k) and haven’t maxed it out. We highly recommend putting your bonus here!

  • Does it feel like your bonus is taxed heavily? That’s because it probably is. Often taxed as “supplemental income” the best option is to defer into retirement accounts if it’s offered!

Lastly!! For accounts held away or 401(k)s, we highly recommend you bringing these to our attention for our teams to look at. A “buy and hold” strategy in this market is not enough- we need to be reviewing and revising your investments right now. As we look toward the next few months your game plan needs to include: Owning High Quality Assets, Knowing what you own, avoiding complacency, and REBALANCING!

Please reach out with thoughts, questions, or to discuss any of the above. In the interim, let the festivities begin!!