3rd Quarter 2018

Smart Year-End Financial Moves

Smart Year-End Financial MovesAs the year closes out, this is your last chance to take advantage of some financial benefits for 2018. The following steps can help you stretch your money, save more, and take advantage of key tax breaks before the end of the year.

Bump up 457 savings. You have until Dec. 31 to make tax- deductible contributions to your 457 plan. You can contribute up to $18,500 for 2018, plus an extra $6,000  in catch-up contributions if you're age 50 or older. See if you can squeeze out some more from your paycheck in the last few months of the year. The Savings Boost calculator (www.icmarc.org/savingsboost) illustrates how the extra contributions can grow over time.

Save more in an IRA. If you're looking for an extra way to save, you can contribute up to $5,500 to an IRA in 2018 (plus $1,000 if you're 50 or older). If your modified adjusted gross income is less than $135,000 if single or $199,000 if married filing jointly, those contributions can be to a Roth IRA, which doesn't provide a tax deduction nowbut provides tax-free income in retirement. You have until April 15, 2019, to make IRA contributions for 2018.

Get a tax benefit for charitable gifts. The new tax law nearly doubled the standard deduction, which means fewer people will be itemizing. Because you can't take a charitable deduction if you don't itemize, some people are bunching a few years' worth of charitable contributions into one year to cross the threshold for itemizing.That way, they can still take the charitable deduction. Alternatively, if you're over age 70½, you can transfer up to $100,000 tax-free from your IRA to charity, which counts as your required minimum distribution but isn'tincluded in your adjusted gross income.

Return to top