News & Insights
2018 Year End Planning
Carrie Gallaway, CFP®, CeFt®
With the end of the year quickly approaching, we have prepared this information to help you plan for the end of 2018 and the beginning of 2019.
General Planning for Now and 2019
We want to know about your life events, what financial and family transitions are on the horizon, what can be celebrated and what’s worrying you? Our role as your financial advisor is to offer financial guidance, monitor and track changes with investments and help you plan for your goals.
The more we know about your anticipated financial or family changes, as well as your goals, the more proactive we can be with planning. Many times we think of financial planning for major life events such as retirement, but don’t forget we help with planning for all life events; a career change, real estate purchase, private school tuition payments and medical caretaking situations. We will help you successfully navigate the personal and professional aspects that come with change.
Check Flexible Spending Accounts to confirm you’ve spent the entire balance. If relevant, check contributions to your Health Savings Accounts for 2018.
We take Cybersecurity seriously at YorkBridge. In order to protect yourself from identity and data theft, we ask you to review the attached list of Cybersecurity best practices.
As a reminder, when transferring money from a YorkBridge account to an account at another financial institution, a YorkBridge employee will verbally confirm the transfer. We are happy to receive an email to initiate a transfer request, but we will call you for verbal confirmation.
If you’re making donations to charities, we recommend using highly appreciated stock in place of cash. Transferring stock to your charity allows you to avoid capital gains while still generating an income tax deduction. To ensure that charitable stock gifts are completed before year-end, we recommend that you send us your instructions as soon as possible and no later than December 14th, 2018.
If you have longer term philanthropic objectives or would benefit from a larger charitable deduction in 2018 (especially in light of the changes in tax laws and the standard deduction threshold), you may want to consider establishing a donor advised fund. You may benefit from “bunching” or consolidating your donations into one year. Contact us for more information and to discuss your personal situation.
As a reminder, donations over $249 to charities require an acknowledgement from the charity and documentation must be kept regardless of the size of the donation.
Qualified Retirement Distribution: If you are over age 70 ½ you may direct all or part of your required minimum distribution to a charity. Utilizing this strategy reduces your taxable income while allowing you to make a charitable donation or gift.
General Wealth Planning and Tax Strategies
Throughout the year we’ve been managing capital gains within portfolios held at YorkBridge and have been notifying you of these amounts. If by chance you hold assets outside of YorkBridge and realized gains this year, such as with regards to a private investment, company stock, or the sale of real estate, please let us know so we can offer guidance and plan with you and your tax advisor.
Reminder: January 15, 2018 is the due date for 4th Quarter 2018 Estimated Tax Payment.
Loans, Mortgages and Home Equity Lines of Credit: Year-end is a good time to review the interest rates on any loans to determine if a refinance or other change is needed. Interest rates have risen this year. If you have a floating rate loan or a loan that could adjust in the future, now is the time to review it.
Gifting and Wealth Transfer
For 2018 the annual gift exclusion is $15,000 per individual and gifts must be made prior to December 31, 2018. Checks to individuals must be cashed prior to December 31st. The 2019 gift exclusion will remain $15,000 per individual. Parents and grandparents may want to consider additional tax-free gifts in the form of direct payments for health insurance premiums, medical expenses, or school tuition. These payments must be made directly to the applicable institution to qualify for this unlimited exclusion.
Review contribution amounts to 529 College Savings Plans and discuss front-loading the contributions to a new plan. A married couple can contribute as much as $150,000 in 2018.
Estate Plans: Review your estate plans with a qualified trust and estate attorney. The tax act of 2017 raised the federal estate tax level, but estate tax laws still vary by state. Review your last will and testament, power of attorney and healthcare proxy to see if they need updating. It is critical that your estate documents reflect your current wishes.
Check and review your 401(k) contributions to ensure you are contributing the maximum salary deferral. For 401(k), Roth 401(k), 403(b) and 457 plans the maximum salary deferral is $18,500. Participants over age 50 may contribute an additional $6,000 per year.
2019 contribution limits increase to $19,000 for a 401(k) Roth 401(k), 403(b) and 457 plans. The catchup contributions for participants over age 50 remain the same at $6,000 per year.
Maximize contributions to Traditional IRAs and Roth IRAs for 2018. Contributions for 2018 may be made until April 15, 2019. The maximum contribution amount is $5,500 if you’re under age 50 and $6,500 for those over age 50.
2019 IRA contribution limits increase to $6,000! And if you’re over age 50, you can still make a catchup contribution of an additional $1,000.
For those with self-employed income, discuss with us the options for retirement plans. Depending on your situation establishing a Defined Benefit Pension Plan, Individual or Solo 401(K) and Profit Share Plan, SEP IRA or SIMPLE IRA may be appropriate.
It’s never too early to save! Please encourage your children or grandchildren with earned income to speak with us about setting up and contributing to a ROTH IRA.
The Information contained in this document is based on data received from third parties which we believe to be reliable and accurate. YorkBridge Wealth Partners, LLC has not independently verified the information and does not otherwise give any warranty as to the truth, accuracy, or completeness of such third party data, and it should not be relied upon as such. Any opinions expressed herein are our current opinions only. YorkBridge Wealth Partners, LLC is an SEC Registered Investment Adviser under the Investment Advisers Act of 1940 (“Advisers Act”). Registration of an investment advisor does not imply any specific level of skill or training. The information contained in this document is to assist with general planning. Please consult with your own tax advisor and attorney for more specific information.