{"id":376697,"date":"2021-12-04T23:46:00","date_gmt":"2021-12-04T20:46:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/outside-the-box-5-financial-moves-to-make-before-december-31\/"},"modified":"2021-12-04T23:46:00","modified_gmt":"2021-12-04T20:46:00","slug":"outside-the-box-5-financial-moves-to-make-before-december-31","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/outside-the-box-5-financial-moves-to-make-before-december-31\/","title":{"rendered":"#Outside the Box: 5 financial moves to make before December 31"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a35e1d17635c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a35e1d17635c\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/outside-the-box-5-financial-moves-to-make-before-december-31\/#There_are_still_ways_to_save_money_on_your_2021_taxes\" >There are still ways to save money on your 2021 taxes<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/outside-the-box-5-financial-moves-to-make-before-december-31\/#Harriet_Edleson\" >Harriet Edleson<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Outside the Box: 5 financial moves to make before December 31<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"There_are_still_ways_to_save_money_on_your_2021_taxes\"><\/span>\n  There are still ways to save money on your 2021 taxes<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\" role=\"region\" aria-label=\"article body\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000505148\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000505148\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       As the calendar year\u00a0winds down, it\u2019s a good time to check for steps you can take to improve your 2021 financial outcome.<\/p>\n<p> Year-end is a time to look at what your tax liability is likely to be for 2021. \u201cTake a look at your tax situation, what your tax picture looks like for the year,\u201d says Roger Young, senior retirement insights manager at T. Rowe Price. What is your taxable income likely to be?<\/p>\n<div class=\"paywall\">\n       Even if you\u2019ve done some planning throughout the year there are still ways to save money on your 2021 taxes. Yet, in some cases, you must act by Dec. 31.<\/p>\n<p>\u201cYear-end is a good opportunity to take stock,\u201d says Rob Williams, managing director of financial planning and retirement income, Schwab Center for Financial Research. What you decide to do \u201cwill vary a little bit if you are still employed.\u201d<\/p>\n<p>Here are some steps to take before Dec. 31.<\/p>\n<p><strong>If you are still working, max out your contributions to an employer-sponsored 401(k) plan.\u00a0<\/strong>The 401(k) contribution limit is $19,500 for 2021. If you are 50 or older, you can also make an annual catch-up contribution of up to $6,500 before Dec. 31. Some employers allow you to put some or all of a year-end or holiday bonus into your 401 (k) so ask your company benefits manager if that is permitted, says Greg McBride,\u00a0senior vice president, chief financial analyst, for Bankrate.com, a personal financial website.<\/p>\n<p><strong>Take your required minimum distribution (RMD).<\/strong> If you have reached age 70 \u00bd in 2020 or later, you must take your first RMD by April 1 of the year after you reach 72, according to the Internal Revenue Service. <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">General<\/a>ly, you have to begin withdrawing funds from your traditional IRA, SEP IRA, SIMPLE IRA, or retirement plan account. Otherwise, RMDs begin at age 70 \u00bd. The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) changed the age from 70 \u00bd to 72. You can plan or take the withdrawals before the end of 2021. The penalty for not taking your RMDs in time is steep: 50% of the amount not taken on time.<\/p>\n<p>Read: Ready to get out of town? 5 tips from experts who <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">travel<\/a>ed successfully during the pandemic<\/p>\n<p><strong>Consider a Roth conversion.\u00a0<\/strong>Converting a traditional IRA to a Roth IRA must be completed by Dec. 31. \u201cYou can\u2019t reverse it once you execute the conversion,\u201d Schwab\u2019s Williams says. If you are not yet taking RMDs, consider converting a traditional IRA to a Roth. \u201cA Roth conversion is most beneficial if you expect that your requirements on distributions in retirement (RMDs) might be in a higher tax bracket than your current bracket,\u201d says economist Wade Pfau, author of \u201cRetirement Planning Guidebook: Navigating the Important Decisions for Retirement Success.\u201d \u201cRMDs can bump you into a higher tax bracket.\u201d The Roth conversion can reduce the amount of RMDs in the higher bracket later, Pfau says.<\/p>\n<p>In general, if you are in a relatively low tax bracket this year because you are in phased retirement or working a part-time job, and haven\u2019t yet claimed your <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security retirement benefits, it can be time to consider converting a traditional IRA to a Roth IRA as well.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Read: Have you claimed Social Security and then gone back to work? You may face the \u2018earnings test\u2019<\/p>\n<p><strong>Check your capital gains (and losses) for 2021.\u00a0<\/strong>\u201cIn a year like this when markets have done very well,\u201d you may not have losses, says T. Rowe Price\u2019s Young. \u201cYou might have some gains, and it might be harder to find those losses. Tax-loss harvesting might be hard to do,\u201d he says. Yet, this might be a time to sell securities at a profit. \u201cIf you haven\u2019t taken your Social Security, before Dec. 31, 2021, look at what your (income) tax bracket is or might be\u201d for 2021, says Schwab\u2019s Williams. Ask yourself, \u201cHow much room do I have before I hit the next tax bracket?\u201d<\/p>\n<p>If your earned income is lower than it might be in the future, this can be a \u201cprime opportunity to take some of those earnings,\u201d Williams says. \u201cPeople don\u2019t like to pay tax before they have to, but sometimes it\u2019s advantageous. If you have lower taxable income, pay tax now to give yourself the flexibility of not having to pay any (tax) or paying more tax later.\u201d<\/p>\n<p>For long-term capital gains, generally you will be in a 0%, 15% or 20% tax bracket, depending on your earned income. For a single tax filer, earning $40,400 or less or for married joint tax filers earning $80,800, or less you\u2019ll be in the 0% tax bracket for long-term capital gains. (Long-term capital gains are investments you\u2019ve held for more than a year.)<\/p>\n<p><strong>Speak to a tax adviser before Dec. 31.\u00a0<\/strong>\u201cBe tax aware,\u201d says Williams. \u201cWe can\u2019t predict markets but we do have some control over planning for taxes. Don\u2019t wait until the year is over to speak to a tax adviser. You have to make these sales before the year ends.\u201d If you sell equities within a retirement account and leave the funds in the account, it\u2019s not a \u201ctaxable event,\u201d he says. However, within a brokerage account, if you want to lower your concentration of a particular stock, and you sell a stock such as Tesla or Amazon, you may have to pay capital-gains tax on the earnings. It will depend on your earned income level. \u201cIf you\u2019re in a lower tax bracket than you might be later, you could sell and pay some tax on it,\u201d Williams says. \u201cDon\u2019t let paying taxes stop you from doing it.\u201d You can reinvest the money. If you have some losses, you can do what is called tax-loss harvesting. You can sell a stock at a loss and another for a gain to offset the loss as a way to reduce your tax liability. You can use the loss to reduce your capital gains. In addition, if your capital losses are greater than your capital gains, you can sometimes offset up to $3,000 of ordinary income. Check with your tax adviser. Also, see the\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.irs.gov\/taxtopics\/tc409\" class=\"icon none\">IRS Topic No. 409<\/a>.<\/p>\n<p><em>Harriet Edleson is author of the book, \u201c<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/howtoretireonless.com\/\" class=\"icon none\">12 Ways to Retire on Less: Planning an Affordable Future<\/a>\u201d\u00a0(Rowman &amp; Littlefield). A former staff writer\/editor\/producer for AARP, she writes for The Washington Post Real Estate section<\/em>.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Harriet Edleson\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Harriet_Edleson\"><\/span>Harriet Edleson<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-77B5-3CBAE4C43433%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Outside the Box: 5 financial moves to make before December 31&#8221; There are still ways to save money on your 2021 taxes As the calendar year\u00a0winds down, it\u2019s a good time to check for steps you can take to improve your 2021 financial outcome. Year-end is a time to look at what your tax liability&#8230;<\/p>\n","protected":false},"author":1,"featured_media":376698,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-444628\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-376697","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/376697","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=376697"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/376697\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/376698"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=376697"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=376697"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=376697"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}