Wow that seems out of place.  The holidays can’t possibly be creeping up on us already.

But the stark reality is that they are, and now marks the time to initiate your year-end planning. Don’t wait until next year and your options are virtually eliminated.

There are many resources to take advantage of to keep you front and center of your financial plan….even if you have never had one!

For those who have accumulated wealth and/or own a business, it may be a good opportunity to convert some of the IRA assets into a Roth IRA.

In doing so, you’ll want to make sure that you set up separate Roth IRAs for different asset classes.   Why?  You have the ability to be able to recharacterize a Roth IRA should the upcoming year results in a loss.  For instance this year you had until October 1 to recharacterize any Roth conversions from the prior year.  Which assets may be recharacterized?

Investments which lost money.  For this year, bonds may have been a marginal loser.  Particularly, treasury inflation protected bonds and bonds that had long durations. Some foreign investments such as emerging markets did not fare as well as the last 12 months. Some stocks as well.

The following may come with some level of trepidation, particularly for those who just filed their tax returns,  business owners, you will want to be sure to get your books up to date and explore your options that take into consideration all of the tax law changes. Tax rates for 2014 posted a significant increase. 🙁

It could be a motivator to set up that profit-sharing plan or maybe even a defined-benefit plan.  I know a host of business owners who are setting up the defined benefit plans and getting deductions in the $130,000 $200,000 range.  It will save them between $52,000-$100,000 in tax bills this year.

Did you know you can legally give preference to key employees and owners in a profit sharing plan as long as certain provisions are adhered to?   Although it is too late for a safe harbor profit sharing plan as of 10/01, setting up a profit sharing plan can be a considerable advantage.

For those who will be buying their insurance from the exchange, they will now need to monitor their income and how it impacts their tax picture.  I have seen scenarios where earning a few dollars in income have triggered $10,000 of additional medical insurance taxation in addition to regular taxation.

If you have reached age 70 1/2 it is time to start to consider your required minimum distribution From your retirement plans. Don’t wait until the last minute!  Failure to distribute is a 50 percent excise tax. Ouch!

As we round out our own planning for the year, what are your goals and objectives for the upcoming year and how will you achieve them and how will you track them? How did you do this year compared your goals and what did you learn and how can you improve?  As the economy continues to improve what types of communication do you have with your clients to keep in touch and expand your client base?  What is on your reading list to help you build your business, or get ahead as an employee?
For more information on year end planning and a helpful list, please click here to view.