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20 Tips for Wrapping Up Your 2016 Finances

Estate Planning Financial Advisor Financial Planning Retirement Planning Tax Planning December 15, 2016 Author: Woody Derricks

As the year comes to an end, there are many ways you need to wrap up your finances. From 401k contributions and health care enrollment to beneficiaries and 529s, your actions from now until December 31st can make a significant impact on your 2016 tax return – and your 2017 financial outlook.

Here is our list of 20 financial questions you need to ask yourself before the new year:

1. Have I maxed out my 401k?

You get to contribute $18,000 to your 401k in 2016, so make sure you’ve done it.  Not only will that money grow over the years, but your contributions are tax-deductible.

2. What is my IRA situation? If you don’t have a traditional or Roth IRA, set one up now. If you are self-employed, you can establish a SEP IRA or other retirement plan for your business. Some retirement plans may allow you to contribute until April 15th and still have it count towards your 2016 taxes. You could also look at doing a traditional to Roth IRA conversion before the end of the year.

3. Do I need to make any withdrawals to avoid penalties? Speaking of withdrawal limits, if you are 70 ½ or older, you must take a minimum amount out of your 401k and traditional IRA every year or the IRS will penalize you.

4. What charities would I like to support? Donating during the holidays is an excellent way to teach your children to give back and help the less fortunate. For your charitable donations to count towards your 2016 return, receipts must be signed and dated by December 31st. Remember to photograph any high-value donation items for your records.

5. Is it the right time to give a gift? You may gift someone up to $14,000 per year without triggering a taxable event. If you think that this might be a good way to alleviate your estate taxes, consult with your financial advisor.

6. Do I need to make healthcare changes? Medicare changes can be made until December 7th. If you need to apply for coverage under the healthcare exchanges, you have until December 15th. For those of you with Flexible Spending Accounts (FSAs), you need to use up your dollars by the end of the year. In some cases, however, your employer may allow either: (1) rolling over up to $500 into next year, or (2) a grace period that runs until March 15th to spend the remainder of your money. If you aren’t sure if your company offers one of these options, contact your HR representative today. Any funds that aren’t used will be forfeited back to your company.

7. Could my home benefit from an energy-efficient purchase? If you have been waiting to update your windows or maybe your old, inefficient heating system, now is the time to do it. If you purchase qualifying energy-efficient appliances and other items before the end of the year, you might be able to take advantage of a tax credit for your 2016 taxes.

8. What is the status of my college savings? Are you saving enough for education? Consider using in a 529 if you aren’t happy with your current savings. Also, grandparents can help with 529s; they can gift their $14,000 five years in advance – all at once – so that $70,000 could go into your 529 this year alone for a great jump-start to your college savings. Consult your state’s plan and your CPA regarding state tax deductibility.

9. Where is my social security surplus going to go? If you earn over $118,500, you will notice that your paychecks are larger this time of year because your Social Security contribution has maxed out. Instead of just letting that money disappear into your bank account, use it to pay off debt, pad your emergency fund, or augment your retirement plan savings.

10. Should I alter my investment strategy? If you’ve done well in the stock market this year and are looking at some capital gains taxes, think about selling off some stocks that haven’t performed well for you. These losses can be written off on your taxes and could help to offset any capital gains you may have.

11. What changes do I need to make in my insurance? It’s good to go over your insurance policies with your agent at the end of every year. Did you finish your basement? Did you have another child? Your policies will need to be adjusted to keep up with your changing needs.

12. How effectively did I save this year? Take a step back to assess how well you saved this year (and how poorly you spent). If your goals have changed, you also need to adjust your savings accordingly.

13. What is the best plan for paying off my debt? Many experts say you should pay off higher interest rate credit cards first, while others say it’s better to tackle small balances for quick psychological wins. Whatever your strategy, plan out how you will pay down your debt in 2017 for better overall financial health.

14. How does my emergency fund look? Did you have to tap into your emergency fund during 2016? It’s OK if you did – that’s what it’s there for – but you may need to rebuild it. Try to keep enough money for three to six months worth of expenses in there, just in case.

15. What major expenses will I have in 2017? Planning on a trip to Alaska in 2017? Or maybe a cruise through Europe? Budget how you will pay for any major purchases or vacations next year in advance, just to make sure that you can afford them.

16. Can I get better deals on any of my monthly expenses? Call your cable or satellite company, and even your cell phone carrier, and let them know that you are shopping around. Tell them what competitors are offering you, and see what they say. You’ll be surprised at how much you can save by doing this once a year.

17. Does my withholding need to be adjusted? As the year comes to an end, it’s time to consider how much you are withholding for taxes. Most likely, something has changed in your life that will require you to make an adjustment. Discuss any changes to your withholdings with your CPA.

18. How am I going to organize for my 2016 tax return? Start categorizing receipts now so that you can file your return sooner in 2017.

19. Do I need to change my beneficiaries? If you got divorced, married, or had a child in 2016, you might need to alter the beneficiaries on your insurance policies and retirement plans.

20. Do I need to update my power of attorney or health care directive? Has your family changed in 2016, or perhaps just your health? No matter what age you are, it’s always good to have a plan in place.

2016 may have been a great year for you financially, or a total bust. Regardless of how it treated you, it’s possible to get your finances in order before the new year hits. With some planning and a few phone calls, you’ll be ready to tackle debt in 2017 and save more than ever. As always, if you need a little guidance, contact Partnership Wealth Management today. We’d love to help you get your finances on track.

The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual.  Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation.


Partnership Wealth Management is comprehensive financial services company. We are committed to providing our clients with financial planning and wealth management services to help them make the most of their investments. At Partnership Wealth Management we have a long history of working with the LGBT community. Among our many services we offer financial planning for gay couples and lesbian couples as well as estate planning for gay couples and lesbian couples. Financial planning is an important part of preparing for the future, contact us today to get started: www.partnershipwm.com.