Gabriel Katzner - December 30, 2019 - Income Tax Planning
productivity tips for the new year

Are you feeling bogged down by clutter, deadlines, and incomplete tasks? As we approach the new year ahead, make it your goal to do a few simple things over the course of a day or two that will bring you increased productivity and peace of mind for 2020.

Tidy your Tech

Just like your home, your technology should be decluttered occasionally to help it—and you—stay efficient. Listen to your favorite tune or watch an old movie while you take steps to refresh your technology.

  1. If your voice mailbox is full, delete old messages.
  2. If your email inbox contains more than a few unread messages, skim them and delete or archive old messages. If your inbox is frequently inundated with promotional emails, unsubscribe to permanently reduce the clutter.
  3. If your cell phone is crammed with apps you never use, remove them and keep only the ones you need.
  4. Check your computer’s storage settings and delete or move old files to an external drive.
  5. Update your Facebook profile. Review your privacy settings, remove access to third-party websites and applications you do not use, review your friends and followers to make sure you still want them to see the content you are sharing, look at groups you have joined to see if there are any you are no longer interested in, and remove tags you do not want to share.
  6. Physically dust and wipe down your laptop, mouse, phone, and other devices with an electronic-friendly spray and wipe. These devices harbor an astounding number of germs—more than the typical toilet.

Tackle Your Financial To-Dos

Don’t miss financial deadlines, some of which may result in lost opportunities, forfeitures of funds, or even tax penalties if they are left undone. Make sure your hard-earned money is working for you.

  • Review your 401(k) plan to see if you can meet the annual contribution limit. If you can contribute more, increase your election before the end of the year. In 2019, investors can contribute a maximum of $19,000—and those age 50 and older can make an additional $6,000 catch-up contribution, lowering their taxable income for the year the contributions are made. While you are at it, review your asset allocations, and check to see if your account needs to be rebalanced.
  • Use up the funds in your medical or dependent care flexible spending accounts (FSAs) to avoid forfeiting your contributions. These accounts allow you to make pre-tax contributions to pay for certain qualifying medical or childcare expenses, but they must be used by December 31st, as rollovers are typically not permitted. Some medical FSAs allow $500 to be rolled over to next year and others have a grace period option allowing employees to incur expenses for two-and-a-half months after the end of the plan year, or until March 15th for a plan ending December 31st.
  • Take the required minimum distributions (RMD) from your Individual Retirement Account (IRA), 401(k), or other retirement savings plan if you are 70 ½ or older. (Under the current law, RMDs must begin at age 70 ½ – but that could change if Congress passes the SECURE Act.) If you do not take your RMD by December 31st, the IRS can impose a stiff penalty—50% of the amount of the distribution you neglected to take, which could amount to thousands of your hard-earned dollars.

Wrap Up Personal Loose Ends

Often, things we consider urgent take precedence in our schedules, and other tasks can be pushed aside. Set aside a few minutes to take care of some personal matters before the end of the year.

  • According to the REAL ID Act passed by Congress in 2005, by October 1, 2020, all individuals are required to obtain a REAL ID compliant driver’s license or ID from their state’s driver’s licensing agency if they wish to fly on a plane or gain access to some federal facilities. Don’t wait until the last minute, since the DMV will not be able to provide the new card the same day and will have to mail it to you. If you do not have a REAL ID, you will be out of luck when you try to board that flight scheduled for October 2, 2020.
  • Call an old friend you have been meaning to contact. Reconnecting with important people in our lives can be healthy and energizing.

Meet Year-End Estate Planning Deadlines

Take a look at these year-end estate planning goals. Some of them provide strong tax benefits.

  • Under current federal tax law, you can give away $15,000 per person, per year, without paying any gift tax on that transfer or affecting the unified credit amount. If you would like to make tax-free gifts this year, make sure that you do it before December 31, 2019, to take advantage of the annual gift tax exclusion. Starting January 1, 2020, you can make additional tax-free gifts up to the exclusion amount if you choose.
  • If you have created an irrevocable life insurance trust (ILIT), you should make a gift to the trust in the amount of the premium due for the insurance policy in plenty of time for the trustee to send out the “Crummey” notice to the trust’s beneficiaries. This notice lets them know of their right to withdraw that amount before a specified deadline before paying the premium. Regardless of when next year’s premium is due, it is a great idea to do this as part of your year-end estate planning tasks. This will keep the insurance proceeds from being included in your estate for tax and probate purposes.
  • Consider new strategies for your charitable giving before the end of the year. Under the new tax law passed in 2017, the standard deduction was nearly doubled and is now $24,400 for married couples filing jointly. As a result, some have considered making contributions in one year that they previously would have made over the course of two years to enable them to benefit from itemizing deductions. For example, if a couple has $10,000 in local property taxes and $5,000 in mortgage interest expenses, and they normally would have made a $7,500 annual contribution to their favorite charity, they would not benefit from itemizing their deductions, as the total amount they could deduct is $22,500. If they double their contribution to $15,000 this year, that would bring their itemized deductions to $30,000, which is significantly higher than the standard deduction. Then, in 2020, they would not make a charitable contribution and could utilize the standard deduction.

Give Us a Call Today

Many of your year-end chores are easily accomplished on your own. However, when it comes to your estate plan, an experienced estate planning attorney can make sure that everything is done as the law requires and in a way that helps you meet your goals. Contact us to schedule a meeting so we can help.

You can schedule a call with us or reach us directly at 855.528.9637 to learn more about how best to plan today to protect those most important to you.

Online Appointment Request

Schedule Consultation  


Call Our Office

  (855) 528-9637