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End-of-the-Year Money Moves in 2021 Thumbnail

End-of-the-Year Money Moves in 2021

What has changed for you in 2021?

For some, this year has been as complicated as learning a new dance. Did you start a new job or leave one behind? That’s one step. Did you retire? There’s another step. If notable changes took place in your personal or professional life, then you may want to review your finances before this year ends and 2022 begins. Proving that you have all the right moves in 2021 might put you in a better position.

Even if your 2021 has been relatively uneventful, the end of the year is still an excellent time to get cracking and see where you can manage your overall personal finances.  

Keep in mind that this article is for informational purposes only and is not a replacement for real-life advice. Please consult your tax, legal and accounting professionals before modifying your tax strategy.

Do you engage in tax-loss harvesting?

That’s the practice of taking capital losses (selling securities for less than what you first paid for them) to manage capital gains. You might want to consider this move, but it should be made with the guidance of a financial professional you trust.1  

In fact, you could even take it a step further. Consider that up to $3,000 of capital losses in excess of capital gains can be deducted from ordinary income, and any remaining capital losses above that amount can be carried forward to offset capital gains in upcoming years.1

Do you want to itemize deductions?

You may want to take the standard deduction for the 2021 tax year, which has risen to $12,550 for single filers and $25,100 for joint. If you think it might be better for you to itemize, now would be a good time to gather the receipts and assorted paperwork. 2,3  If  you are unsure consider speaking with a qualified tax professional before years end to make any possible moves.

Are you thinking of gifting?

How about donating to a qualified charity or non-profit organization before 2021 ends? Your gift may qualify as a tax deduction. For some gifts, you may be required to itemize deductions using Schedule A.4

Given the topic of year-end moves, why not take a moment to review a portion of your estate strategy? Specifically, take a look at your beneficiary designations. If you haven’t reviewed these designations for some time, double-check to see that these assets are structured to go where you want them to go in the event that you pass away. Lastly, look at your will, and other important estate planning documents, to make sure they are still valid and up-to-date.   

Check on the amount you have withheld from any earnings. If you discover that you have withheld too little on your W-4 form so far, you may want to adjust this withholding before the new year begins.

What else can you do before ringing in the New Year? 

Consider speaking with a financial or tax professional. Do it sooner rather than later as the benefits are likely to have compounded benefits. Even small end-of-year moves might help you improve your short-term and long-term financial situation.

  1. https://www.investopedia.com/articles/taxes/08/tax-loss-harvesting.asp
  2. https://www.nerdwallet.com/article/taxes/standard-deduction
  3. https://www.investopedia.com/terms/s/standarddeduction.asp
  4. https://www.investopedia.com/articles/personal-finance/041315/tips-charitable-contributions-limits-and-taxes.asp

This content is developed from sources believed to be providing accurate information, and provided by Meenes Wealth Partners. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.