Year End Financial Checklist

by | Oct 11, 2022 | WWC WorthWhile Reading


Well, the leaves are beginning to change and that means the year is winding down and it’s time to give your end-of-year financial check list items with deadlines a close look. Start planning and get items checked off before deadlines hit. Below are a few things that should be on your list:


  1. RMDs or Required Minimum Distributions – A required minimum distribution (RMD) is the amount of money that must be withdrawn from an employer-sponsored retirement plan, traditional IRA, SEP, or SIMPLE individual retirement account (IRA) by owners and qualified retirement plan participants of retirement age. (Not Roth IRA). RMDs start April 1st the year after you turn 72 (and December 31st thereafter). It is based on the value of your account December 31st of the year prior. Because the life expectancy factor changes each year, the percentage of the IRA that must be distributed changes each year. Distributions can be used for anything. Examples: Charitable Giving through Qualified Charitable Distributions, Supplemental monthly income needs, or if you do not need the income, consider adding the distribution to a taxable investment account for continued growth.



  1. QDC or Qualified Charitable Distributions – A qualified charitable distribution (QCD) allows individuals who are 70½ years old or older to donate up to $100,000 total to one or more charities directly from a taxable IRA instead of taking their required minimum distributions. As a result, donors may avoid being pushed into higher income tax brackets and prevent phaseouts of other tax deductions, though there are some other limitations. Qualified charitable distributions can be made only to certain qualified charitable organizations, as defined in the tax code.



Currently, QCDs cannot be made to donor-advised fund sponsors, private foundations and supporting organizations, though these are categorized as charities. NOTE: Donors should check before making a gift to ensure the      organization is qualified to accept QCDs.



The deadline for making distributions is December 31, but check with your custodian because request deadlines may be earlier due to processing.





  1. Roth Conversions – You should consider a Roth conversion if you are a diligent young saver who expects their income to climb over the years, an older individual whose tax bills could jump when they start taking required minimum distributions, big savers who want to reduce future tax bills for themselves or their heirs, or If the IRA owner expects to be in the same or a higher tax bracket in retirement.


Types of retirement accounts can be converted to a Roth IRA are traditional IRAs, rollover IRAs, SEP IRAs, SIMPLE IRAs (only after the SIMPLE IRA account has been held for at least 2 years), and employer retirement plan (401, 403(b), and 457(b)) assets.


Benefits of a Roth Conversion are future withdrawals that are tax-free (if meeting Roth Distribution rules). Conversions have no required minimum distributions and pass to heirs tax free! A key benefit of doing a Roth IRA conversion is that it can lower your taxes in the future. While there’s no upfront tax break with Roth IRAs, your contributions and earnings grow tax-free.


Deadline is December 31st of the current year.



If you are not sure if you need to participate in all or any of the above items, give your financial advisor a ring! Here at WWC we are aways happy to talk (and walk) you through your financial web.


**Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.