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Health & Fitness

Financial End of Year Planning

As we approach the end of the year, here's a reminder on potentially saving more of your money by managing your tax bill.  While this blog is not intended to serve as any type of tax advice, which is best served by consulting with your tax advisor, there are some strategies that people may want to consider in the remaining days of 2013.

1.      Evaluate your mutual funds that are currently held in Taxable (Non-Qualified) accounts.  December is a very popular month for many mutual funds to distribute end of year short and long term capital gains distributions.  Given the tremendous run up the stock market has enjoyed thus far, coupled with that fact that many funds have exhausted the losses that they once carried forward from 2008-2009, investors may be in for a “sticker shock” when they see their 1099’s listing the taxable distributions for 2013.

2.      Asset Location: Do I have the right types of investments in the right types of accounts?  Certain types of investments such as ETF’s are often great to own in Taxable accounts as they are considered to be tax efficient since most broad-based ETFs do not typically make capital gains distributions—which are subject to taxation when held in a taxable account.  If you own investments that make frequent taxable distributions however you do not rely on the income, perhaps those investments can be shifted to Tax deferred accounts?  These types of decisions around asset location are great conversation points to have with your financial planner.

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3.      Donating directly to a specific charity can be a very simple way to give and allows you to maintain a great deal of control over where your money goes.  Direct giving can include money, investment securities, property, or time and talent.  Direct giving can provide significant income tax advantages.  (Consult with your tax advisor before you make your direct giving decision).  

4.      Review your ability to take losses to offset capital gains.  If you do not have carry forward losses and have taken some capital gains, you may want to explore those investments within your portfolio that are currently at a loss to possibly sell to help offset some of those gains.  Please be aware of the “wash sale rules” and also evaluate other items such as growth potential for the investment should you not sell. 

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This is not an all-inclusive list, and as discussed we would recommend a case by case discussion with your financial planner and tax advisor for more specifics to how you may individually evaluate your options.  The key point being, the end of the year is fast approaching, and now is the time to evaluate your options to make sure that you don’t leave anything on the table that might help make you be more tax efficient.

 

To discuss how this subject or other financial subjects may relate to your own financial circumstance, please contact me at the contact information below: 

Christopher N. Congema, CFP®

President, Investment Advisor

 

Core-X Wealth Management, LLC

900 Walt Whitman Road, Suite 208

Melville, NY 11747

631-923-2485 Phone

 

www.core-xwealth.com

chris@core-xwealth.com

 

This communication is from Core-X Wealth Management, LLC, a New York State Registered Investment Advisory firm. The information in this blog is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.   

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