The Top 12 Year-End Financial Planning Tips

The Top 12 Year-End Financial Planning Tips

Your all-important financial checklist for the end of 2020.

The countdown to the end of the year has begun. While many of us have holiday time off and shopping on our minds, wrapping up financial loose ends is more essential than wrapping presents. You do not want to lose money, incur penalties or owe more yearly taxes than necessary, which can happen if you do not check of the boxes on your financial checklist.

Given this unpredictable year, there may be opportunities to help minimize your 2020 tax burden or adjust your financial plans to align with your current situation. Recent legislation, including the Coronavirus Aid Relief and Economic Security (CARES) Act, which benefits those affected by COVID-19, and the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which addresses Required Minimum Distribution requirements, may affect your finances. Before you ring in the New Year, make sure to take care of your financial health to avoid costly mistakes.

1. Contribute to your HSA for next year.

Employers typically have open enrollment in November or December, which brings the opportunity to contribute to a Health Savings Account for next year if you’re on a high deductible plan to cover medical expenses and lower your taxable income. As long as it is used for qualified medical expenses, taxes will not be owed. The money in this type of account can also be invested tax-free.

2. Spend your FSA money.

If you have a Flexible Spending Account, then you likely know that the money does not carry over to the next year. Plan to use any pretax money in the account to pay for any health or dependent care expenses that are not covered by your health plan. This is also a good time to evaluate the amount you needed this year and may want to allocate to next year.

3. Make charitable donations.

Not only can it be beneficial for you to donate to charity, it can benefit your favorite organizations and even your family members if you donate in their name. If you itemize expenses on your tax return, your charitable contributions can be deductible. Explore your tax-efficient giving strategies, maximize giving and benefit your yearly tax situation.

4. Review 401k and IRA contributions.

Review the contributions you’ve made to your retirement accounts. Maximizing your contribution will take advantage of available tax deductions. While you may contribute to your IRA through April for the tax year for the current tax year, it is important to plan now. Also, make sure you are taking advantage of any employer matches in your 401k so that you do not leave any money unclaimed.

5. Complete tax-loss harvesting sales.

If you have taxable investment accounts with positions that have lost value, you may be able to use losses to offset capital gains. While the IRS does limit this strategy, if you want to take advantage of it, complete any sales prior to the end of the year. Even if you don’t currently have gains, you might be able to use up to $3,000 to offset ordinary income and carry over to future years.

6. Request a copy of your credit report.

Each year, you are able to obtain a free copy of your credit report for review. This will provide the chance to catch and fix any errors, or even review your credit card balances and loans. Visit one of many websites, such as, to request a free copy of your credit report.

7. Review your beneficiaries.

Beneficiaries, or those you designate to inherit your account balances, should be listed on IRAs, 401ks and insurance policies. It’s all too common to forget to change beneficiaries as life changes happen. So, it’s a best practice to revisit your beneficiaries at the end of each year to make sure your money goes where you want it to in the event of the unexpected.

8. Review your Social Security benefits.

Even if you’re under retirement age, it’s important to have an account with the Social Security Administration to receive personal information and also to monitor your projected retirement benefits. You can also view what you’ve earned over your lifetime. Having this information at your fingertips will help with your long-term retirement planning and assess whether there are any errors on your account.

9. Check your tax withholding.

Your tax bill for the year can be affected by any changes in dependents, income or marital status. Visit the tax withholding calculator on the IRS website for information on withholdings. You may want to have more taxes withheld from your paycheck, leaving you with a larger tax refund, or you may want to decrease the amount to have more ongoing cash to pay off debt.

10. Prepare for your tax reporting.

It is never too soon to get a head start on your tax return. Start gathering bank statements, tax documents and receipts. If you collected unemployment payments this year, you’ll need to watch the mail for a form from the state. Employers will mail W2’s in January. But making a list and preparing documents in advance will help you take care of your return early and avoid a last-minute crunch, or even potential late fees.

11. Make your New Year’s resolutions.

Don’t forget to include your financial health in your resolutions for next year. The New Year brings new beginnings, along with the chance to make improvements when it comes to credit card spending, your emergency fund and your retirement account balance. Your resolutions do not have to be large, as any small steps will help your retirement years, but it is important to set new goals.

12. Make your financial year-end review appointment now!

Lastly, make your year-end review appointment with your financial professional. It should take around 60 minutes, but possibly could be the most important hour of your year. A review will offer the chance to take a good look at the last 12 months in terms of budget, investment performance, progress toward goals and potential changes for next year.

Please schedule an appointment on Bayntree’s online calendar by selecting the date and time that is most convenient for you! You can also always reach us by emailing

Bayntree Wealth Advisors provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance. Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.

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