As 2019 draws to a close, Santa isn’t the only person making a list and checking it twice.  Clients should keep these 5 things in mind.

  1. Required Minimum Distributions: For clients 70 ½ years old or older, Required Minimum Distributions (RMD) must be taken from qualified accounts by December 31st each year to avoid a 50% IRS penalty.
  2. Gifting Strategies: Annual gift exclusion amount for 2019 is $15,000 per person.  This is the maximum amount you can give to one person this tax year and avoid tax filing implications.
  3. Health Savings Account Contribution: Consider maxing out your Health Savings Account (HSA)  annual contributions or opening an account if you haven’t done so.  To qualify, you must be enrolled in a high-deductible health plan, meaning your insurance plan must have a deductible of at least $1,350 for individuals or $2,700 for families.  Contribution limits for 2019 in HSAs are $3,500 for individuals or $7,000 for families, plus an additional $1,000 catch-up for anyone 55 and older.  The tax advantages include pre-tax contributions, tax-free withdrawals, and tax-free earnings when used for qualified healthcare expenses.
  4. Company Retirement Plans: Max out your retirement contributions to take advantage of company matches and reduce your taxable income.
  5. College Savings Plans: Missouri residents can reduce their taxable income for state tax purposes by up to $16,000 per household by contributing to college savings plans (529 plans).  These plans now allow investors to pay for not only college education costs, but also primary and secondary education expenses.

Questions on these financial strategies?  Call Hovis & Associates today for an appointment.