​​​2020 provides unique year-end tax planning opportunities for several reasons, including lower tax rates, the Secure Act passed in late 2019, and the Cares Act passed earlier this year. While we expect there to be tax code changes down the road as a result of a new presidency and legislature, it is important to stay focused on current tax planning opportunities with an eye to the future.    
Potential opportunities include

Income Bracket Management:  

• For retirees, this year, knowing where to save, as well as how and from which account to pull funds can help minimize your tax liability longer-term and maximize the benefit of lower rates. 

 Type of accounts in which to contribute:

•  Tax-deferred, tax-free, or taxable accounts.

Partial Roth Conversions:

• Allow you to control when you pay income tax on your retirement accounts and potentially take advantage of lower tax rates and brackets.

Required Minimum Distributions:

• The Secure Act increased the RMD age from 70 ½  to 72
• The Cares Act allows for skipping an RMD in 2020

Charitable Giving:

• New tax incentives for charitable giving in 2020 came in March with the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The law gives donors who plan to take the standard deduction the option to claim an above-the-line deduction of up to $300 for cash contributions to operating charities. The CARES Act also gives donors who will itemize deductions an option to elect a 100% of AGI deduction limit for cash donations, and deduction amounts above this limit may be carried over for up to five years. With both options, the cash donations must be made directly to operating charities and cannot go to donor-advised funds, supporting organizations, or private foundations.

We are including our 2020 End of Year Checklist for your review.  Please feel free to reach out to us with any questions.

​Last month we wrote about essential planning documents for our young adults.  This month it is all about you!  Living through a third surge of Covid-19 is reason enough to get your house in order.

Ideally, you have executed a complete set of estate planning documents, including a will, revocable trusts, health care power-of-attorney, advance directive, and durable power-of-attorney.  If your estate is larger and/or more complex, planning may extend beyond these documents.