Hurry! These Black Friday Financial Savings Won't Last Long

While shoppers attack the malls in hopes of saving a bundle on those must have items, some simple year-end financial moves might just pad your wallet in even bigger ways.  So, think like a shopper and make a mad dash for the Investment Aisle.

Buyer Beware:  Look carefully before grabbing year-end bargains on mutual funds or ETFs for your taxable accounts. Funds, such as these, are required to distribute any gains they have realized during the year. Rather you own your fund shares one day or 360 days, any gains distributed will hit your tax bill, equally. So, ask your advisor, or the fund company about any year end distributions. Don’t forget that funds held in your retirement accounts don’t create the same issue, since these funds aren’t taxed until you take a distribution.            

50% Off  is HUGE:  Taking half off the price of anything, is great. Receiving only half the expected distribution from your IRA, isn’t so great.  If you are over 70 ½ years of age, you must take your annual Required Minimum Distribution (RMD) from your retirement accounts. Failing to do so subjects you to a 50% tax penalty on the amount not taken. How big is your RMD? There’s a simple, though detailed, calculation based on the your account balance and current age. Your advisor or the custodian of your account will be glad to crunch those numbers for you. 

That Perfect Gift:  Cash and coins are always an easy gift to give, especially when it comes to the kettle on the corner, or your favorite charity. But before you reach for your wallet, take a peek at your portfolio. No. The size of your account shouldn’t dictate the giving. But if you’ve got securities with long-term capital gains, it is smarter to gift those shares than to write a check. If you sell that stock and donate the proceeds, you’ll be in line for a nice charitable deduction. But you’re also cued up to pay capital gains tax on the profits from that sale. Instead, simply give the security directly to the charity. You’ll still get the tax deduction for the value donated, but you’ll avoid creating the taxable capital gain.

If you’d like a full copy of our  2015 Last Chance Planning Checklist, email me at: reports@ OsbornWealthManagement.com  You might be surprised at what you can still do before year end. And best of all, you don’t have to stand in a long line at 4 a.m.