In Financial Planning, Investment Management, Personal Finance, Tax Planning

Now, I am by no means a tax expert. Therefore, this blog post isn’t intended to offer explicit tax advice. However, I am a fee-only comprehensive financial planner. As such, I understand how taxes impact your overall finances and how incorporating tax-efficient strategies into your overall financial plan can help you maximize your wealth growth potential over time.

Therefore, today’s post is a quick overview of a few tax moves you should consider making before 2019 under the new tax laws enacted by the Tax Cuts and Jobs Act (TCJA).

Here are some money moves you can make now as we wind down the final few weeks of 2018.

1. Update Your Withholdings

You can check with your tax advisor if you aren’t sure but double-check that you paid enough taxes on your income in 2018 so that you avoid a penalty. Under the new tax reform, plenty of people will experience a tax break, but regardless, make sure you have paid at least 90% of what you owe for 2018 before January 1.

2. Max Out Those Retirement Accounts

The time to max out your retirement accounts is before the New Year starts, even though you can make catch-up contributions if you are age 50 or over to your traditional or Roth IRA up until the due date of your tax return. Perhaps the biggest reason to max out your retirement accounts is so that you are able to take advantage of employer-matches within the contribution year. And here’s the good news! Contribution limits for 401(k), 403(b), 457, the federal government’s Thrift Savings Plan, and individual retirement accounts (IRAs) are increasing by $500 in 2019.

3. Consider Tax-Loss Harvesting

Despite the cheering for a strong economy this year, the markets have struggled causing losses in investment portfolios. If you have some loss positions in your investment portfolio, consider a well-known little strategy called tax-loss harvesting. It works by selling a loss position in your portfolio, so that you can offset your gains within the year. You wind up saving some money on taxes when you do this.

4. Bunch Your Charitable Contributions

If your itemized deductions won’t exceed the $12,000 threshold for single filers, $18,000 for head of household filers, and $24,000 for married filers filing jointly, bunch your charitable contributions and take the standard deduction. This means that instead of contributing to your favorite charity or church this year, you save up your donations for every other year contributions, so that you can do good and also receive a tax benefit. Consider opening a Donor Advised Fund (DAF) to help you manage your charitable contributions. For more tips on making charitable contributions, check out my blog post on HOW TO MAKE CHARITABLE CONTRIBUTIONS UNDER NEW TAX LAW.

5. Don’t Forget to Spend Those FSA Dollars

If you have a flexible savings account, remember that you may be able to carry over $500 to the next year, if your employer allows. This option is called a carryover option and you should review the rules of your flexible saving account to determine if your employer offers this option.  Instead of a carryover option, your employer may offer a grace period option, which may provide you with an additional 2 ½ months after the end of the year to use the money in your account. If neither of these options are available to you, and you don’t use the money by the end of the year, you’ll lose it. Ouch! So, make sure you get in those doctor’s appoints, stock up on some medical supplies and maybe even treat yourself to the chiropractor or therapeutic massage! FSA dollars can be applied to many qualified healthcare purchases, so make it a priority to spend those tax-fee dollars.


Remember to consult with your tax advisor for any specific tax moves you want to make or if you have tax-specific questions. The new tax reform will affect everyone differently, so be sure your CPA is helping you make tax-efficient moves with your money.



Join us for the next installment of FRANKly SPEAKING when I answer the question of how you can know when you are able to retire comfortably. Even if retirement is years away, you can find out if you’re on track.


As always, I invite you to reach out to me – in real life – with any comments, feedback, or questions!  [email protected]Are you ready to take the first step towards securing your financial future? If so, schedule your free 45-minute no-obligation consultation with me today. Schedule Your Consultation with Frank.


Disclaimer: The information contained in this article is for informational purposes.  None of the information provided in this article is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. Please consult with your accountant, finance professional, and/or legal counsel regarding your specific circumstance. Reproduction of this material is prohibited without written permission from Frank Shields, and all rights are reserved. Read the full Disclaimer.

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