Here’s Your Year-end Tax Planning Checklist

While the holidays have us focused on gift lists, there’s another important one to keep in mind. Our year-end tax planning checklist, along with a little help from your tax planner, can make the difference between saving and paying.


Proactive financial experts know the months leading up to year-end are an ideal time to make final tax-saving moves, but this year, the need is greater than ever.

“After this year’s substantial changes to the tax code, many strategies that have long worked for most people will now fall flat,” explained John Vance, CERTIFIED FINANCIAL PLANNER™ and President of Vance Wealth. “And if those tax-saving opportunities aren’t replaced with new ones by year-end, you may lose out altogether.”

To help you prepare for this monumental tax year, we’ve prepared a comprehensive year-end checklist of strategies to help you save. Consider this your list of solutions. All you have to do is pick the strategies that work for you.


Mind Your RMDs

If you take a distribution, consider how it may impact your tax bracket. In a year with less income, you may want to consider taking additional distributions.

  • The year you reach age 70½, take your first Required Minimum Distribution (RMD). You may choose to delay it until April 1 of the following year, but if you take two distributions during the following year, your income could be inflated, pushing you into a higher tax bracket.
  • After age 70½, take your 2018 RMD to avoid a 50% penalty on required amounts not taken, if you have yet to do so.
  • Subsequent RMDs must be taken no later than December 31st each year.
  • Traditional IRA owners can transfer RMDs to a qualified charity and exclude the amount donated from their adjusted gross income, up to $100,000.


Consider Tax-loss Harvesting

During a year with lots of volatility, such as this one, you may end up with some investments with losses. In this case, you may want to realize this loss for tax minimization purposes.

  • Tax-loss harvesting is only applicable in taxable accounts, excluding IRAs and 401(k)s.
  • Selling a losing investment can help you offset gains or establish a deduction of up to $3,000 against ordinary income. Excess losses can be carried forward to future years, as well.
  • Don’t disrupt your long-term investment strategy. Once you’ve identified an investment that’s lost its value, sell it — but replace it with a similar investment. “That way, you’re taking the loss for the write-off, but the investment remains neutral,” John said. “This allows you to gain from the recovery, instead of missing it.”
  • Watch out for “wash sale” rules that affect new purchases before and after the sale of a security. If you sell a security at a loss but purchase another “substantially identical” security – within 30 days before or after the sale date – the IRS likely will consider that a “wash sale” and disallow the loss deduction. The IRS will look at all your accounts – 401(k), IRA, etc. – when determining if a wash sale occurred.


Watch Your Tax Brackets

If you’re at or near the next tax bracket, watch carefully for anything that might bump you up, and plan to reduce taxable income before the end of the year.

  • Evaluate your income sources – earned income, qualified dividends, capital gain distributions, etc. – to reduce the overall tax impact.
  • Consider accelerating deductions or deferring income and bonuses, if possible.
  • Donating to a charity not only benefits the cause you care about, but it may also reduce your taxable income.
  • Contributing to a traditional 401(k) allows you to pay income tax only when you withdraw money from the plan in the future, at which point your income and tax rate may be lower.


Evaluate Major Life Changes

From welcoming a new family member to moving out of state, major life changes can impact your taxes. Bring your financial advisor up to speed, and ask how they could affect your year-end planning.

  • While moving expenses are no longer applicable as an itemized deduction for non-military members, a move definitely constitutes a look at your tax and estate planning, especially if you have relocated from a high-income tax state to a low-income tax state, from a state with an estate income tax to one without or vice versa, or if you have moved to a state with increased asset protection.
  • Job changes, births, weddings and divorces within the family can all necessitate changes.


Next Steps

As you prepare to make the most of your year-end financial moves, remember to talk with a CERTIFIED FINANCIAL PLANNER™ and your tax professional to get the most benefit.

“Changes in our tax code have brought about the largest reform we’ve seen in 30 years, and there’s only one month left to make needed adjustments to your plan. There’s still time to take a proactive approach to new tax law, but if you don’t have a properly revised strategy in place, you will likely lose some of the tax savings you’re used to seeing come April 2019.”

At Vance Wealth, we strongly recommend you meet with a tax planner before the end of the year — especially if your normal tax preparer doesn’t provide tax planning services, in addition to preparing your books. A CERTIFIED FINANCIAL PLANNER™ can help you adjust your strategy and plan for the long-term, so you can achieve more this year.


To learn about the 2018 changes in tax legislation — and get a second pair of eyes on your tax plan — set up a consultation with one of our financial advisors. For more information, please call Shanele Stoll at 888-775-0950.


About Vance Wealth:

Since 2003, Vance Wealth has served as a premier financial planning practice passionately committed to helping clients and families succeed at every step of their financial journey. Serving Southern California, the practice delivers innovative and comprehensive wealth management strategies precisely customized to each client’s goals and needs. Our mission is to help our clients and families succeed at every step of their financial journey, inspiring them to achieve more. We are committed to stand by their sides to help make the difficult decisions, celebrate life’s joys and be a trusted partner for every moment in between. To learn more, call 661-775-0950, email [email protected] or visit To keep up with more exciting news, follow @VanceWealth on Facebook.


The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.