Dec 9, 2020
By The MHV Investment & Retirement Center

How to make smart money moves before the end of the year

Whether you’ve been actively managing your money all year or you’re feeling a bit unprepared, there are some money moves to think about before December comes and goes. As you’re looking at your finances, consider these options:

  1. Tax-loss Harvesting
  2. Itemizing Deductions
  3. Retirement Contributions + Tax Withholdings
  4. Making Donations
  5. Scheduling a Financial Check-up
Keep in mind this article is for informational purposes only and is not a replacement for real-life advice. Please consult your tax, legal, and accounting professionals before modifying your tax strategy.

Tax-loss harvesting

A capital asset is a significant piece of property. Think about things like homes, stocks, cars, and properties. When you sell one of these, and make money off of that sale, you experience what’s known as a capital gain. Capital gains can be long-term or short-term:
  • If you sell an asset that you’ve owned for more than a year and make money on that sale, it’s a long-term gain.
  • If you sell an asset that you’ve owned for a year or less and make money on that sale, it’s a short-term gain.

The income you make from long- or short-term capital gains is taxable income. There are things you can do to offset that money you make from selling a capital asset. Tax-loss harvesting is one such example. Tax-loss harvesting refers to the practice of selling securities at a loss. A security is any tradeable financial asset you own. By selling and reporting the loss, you can potentially offset the income you made by selling your capital asset, thus lowering your taxable income.

Itemizing deductions

Taxpayers have the option of either taking the standard deduction when they file their taxes each year or itemizing their deductions.

A standard deduction is an amount of money that taxpayers are allowed to subtract from their income before the income tax is calculated. The IRS stipulates what that amount is.

When you’re deciding whether you want to itemize your deductions, you’ll want to check with IRS regulations or your tax preparer. If your itemized deductions don’t equal more than the standard deduction, it wouldn’t make sense to do so.
If you do plan on itemizing, it’s important to keep all of your receipts and documentation in one place. This will make it easier to find everything you need to prepare your tax forms.

Check your retirement contributions + tax withholdings

The money you contribute to your retirement plan may reduce the amount of taxable income you have. If you haven’t contributed the maximum allowable amount this year, you may be able to lower your taxable income even more by bumping up your contributions before the end of the year.
You should also check your current withholdings. You’ll need to check your W-4. If you don’t have a copy your Human Resources Department will. If you feel you haven’t withheld enough for taxes, adjust it now to try to catch up. This may help you eliminate or reduce the amount of taxes you owe.

Make a donation

If you’ve been thinking about making a donation, do it before the end of the year. Gifts to qualified charities or non-profits may count as a tax deduction. And this could lower your taxable income. For some gifts, you may be required to itemize deductions using Schedule A.1


Give yourself a checkup

If you haven’t already met with a Financial Professional, consider taking that step now. A Financial Professional can help you feel confident that you’re making the right money moves for this year and your future.

Schedule your zero-cost, no-obligation consultation with a Financial Professional at the MHV Investment & Retirement Center. Schedule Now


This material was prepared in part by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Mid-Hudson Valley Investment and Retirement Center Financial Professionals are registered representatives of CUNA Brokerage Services, Inc. Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members.  Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution.  CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty States of the United States of America. FR-3343757.1-1120-1222
1., July 14, 2020


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