The Family and the 7 Necessary Year-End Financial Tasks

With family, the end of the year is typically a period of celebration, joy, reflection, and planning—with the exception of the frantic holiday shopping, of course. The end of the year also has a second, less well-known, but more important significance: it is the best time of year to complete year-end financial tasks. A new book released, My Estate Planner: A Record Book of my Documentation, Assets, and Obligations from Sunshine Publications, reveals the most essential of these tasks.

The first step in managing your personal finances is always you. You run the danger of making costly mistakes and jeopardizing your financial freedom, control, and security if you don't complete some critical tasks. The advantages of completing these financial tasks typically include protecting and growing your financial investments, lowering your tax bill, accelerating your retirement savings, improving your credit rating, and lowering your insurance costs.

Here, we share seven of the essential year-end financial tasks.

Cut back on investment income. Taxes for capital gains can drastically reduce the overall performance of your portfolio and raise your tax liability. Harvest appropriate capital losses as a result to offset any prior capital gains.

Balance your portfolio once more. Your portfolio and some items may have changed as a result of shifting market prices over several years. You might have to sell certain investments and use the money to buy new ones in order to keep your portfolio optimal—or aligned to meet your goals and objectives.

Maximize your retirement contributions by boosting your retirement account, 403(b), IRA, or other pension contributions, if permitted. Increased contributions will eventually have a very significant intensifying effect on employer matching.

Create an emergency fund to protect yourself against losing your job due to a disability, death, or other unforeseen circumstance. As a general rule, your emergency fund should equal three to six weeks' worth of your usual monthly expenses.

If you are preparing to take advantage of itemizing your deductions, you might want to consider "bunching" them in different tax years. The following tax year, you deduct the regular amount.

Drafting or updating estate planning documents is required to avoid probate, minimize estate taxes, and ensure that your property passes to the people you specify. Examples of these forms include a plan, existing might, charity, power of attorney, and others. You can utilize the estate planning workbook by Sunshine Publications to organize this process.

Make charitable donations that are tax-efficient: You can save a lot of money by making contributions of stock, which is a very valuable asset. Taxpayers frequently gain from getting a donation tax deduction and paying taxes on capital gains on the highly valued item.

The end of the year also has another, less well-known but more significant, significance: it is the best time of year to complete year-end financial tasks. You run the danger of making costly mistakes and jeopardizing your financial freedom, control, and security by failing to finish some essential tasks. The benefits of finishing these financial duties typically include protecting and growing your investments, lowering tax costs, starting your retirement cost savings, boosting your credit score, and lowering insurance costs.

The following tax year, you deduct the regular amount.