Here at Abacus, our mission is to
Take the Fear Out of Finance and this month we want to talk about your Investment & Tax Planning
Below are a few moves we want you to review and consider making if they are in your best interest. And feel free to reach out to us with some questions on your personal
or business strategy!
5 financial moves you need to make before the end of 2020
Tax-loss harvesting: "Consider offsetting your realized capital gains with, if you have any, realized capital losses you’ve incurred during that tax year, or carried over from a prior tax return."
Avoid unwanted capital gains: "If you own mutual funds in a taxable account, look to see whether they will be paying capital gain distributions this year." Discuss with your CPA how you should handle this.
Rebalance your portfolio: "The end of the year is also a good time to review your target asset allocation against your current asset allocation and bring your portfolio back to its target."
Consider a Roth IRA conversion: "It’s almost always a good time to consider converting all or some of your traditional IRA into a Roth IRA." A Roth IRA is an individual retirement account (IRA) that allows qualified withdrawals on a tax-free basis provided certain conditions are satisfied. Roth IRAs are funded with after-tax dollars; the contributions are not tax-deductible. But once you start withdrawing funds, the money is tax-free.
Review your debt: "Review credit cards, student loans, mortgage, home equity, auto loan and any other obligations that are either floating or have interest above 6%, and consolidating higher debt obligations into lower-rate fixed programs to benefit from today’s ultra-low rates – or focus on paying them off in the next six to 12 months."
Founders & CEOs - Have your reviewed your financial plan?
"Your financial plan should be an early warning system, instead of looking at what’s already happened, you make projections for the coming months, forecasting income and outlays. Your projections will act as fire signal, helping you to plan for cash flow dips, identify financing needs and pinpoint the best timing for projects.
It also gives you a tool for monitoring your finances, allowing you to gauge your progress and quickly head off trouble." - BCD
Here are six steps to create your financial plan:
1. Review your strategic plan - Do you need to expand? Hire more staff?
2. Develop financial projections
3. Arrange financing
4. Plan for contingencies
5. Monitor
6. Get help from a CPA
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