8 Year-End Tax Planning and Financial Services Tips

Can you believe another year has already flown by? 

As we move toward the holiday season, it’s time to consider end-of-year tax planning. We know—you felt like you had more time! But, the sooner you start planning, the easier it is for you and your qualified tax professional to help maximize your outcome. So, let’s start with the basics. Here are eight of our best year-end tax planning and financial services tips. 

1. Check on your FSA balance. 

If you’ve opted for a flex spending account to accompany your health insurance, review your account’s terms to determine by what date you should spend those funds. FSAs, like HSAs, are a way to save pre-tax dollars for medical needs; however, unlike HSAs, if you are carrying a balance past a certain date (usually December 31st), you will pay taxes on these funds, as well as lose access to the money. 

Of course, this is dependent on the specifics of your plan, but don’t miss out! Check your account to determine the best time to spend. If you’re nearing the end of the year and still haven’t spent your FSA funds, consider qualifying expenses that can set you up for the next year. These could include taking care of routine appointments, getting new glasses, or filling your prescriptions, for example. 

2. If necessary, take your required minimum distribution from your retirement account. 

If you are reading this information in 2020, please note that the CARES Act has eliminated the need to take RMDs this year. To learn more, please contact your financial advisor. You can also learn more in our recent article, The Cares Act: Understanding How the Stimulus Bill Affects Individuals

If you are at least 72 years old, you will need to take your RMD by the end of the year. However, it is important to note that during the year that you turn 72, you have until April 1st to take your distribution. 

Your distribution will increase your taxable income. You may remedy that by making a Qualified Charitable Distribution (QCD) instead, up to $100,000, and donate it directly to a 501(c)3 charitable organization; however, you will not receive a tax deduction for this contribution. 

3. Assess your current interest rates. 

The end of the year is a great time to review the interest rates on your mortgage, auto loan, and other large expenses. As rates will continue to change and could increase, you may consider refinancing to benefit from a lower rate. You must also consider, however, that refinancing your loans comes with a few overhead costs. Be sure that your overall cost savings outweigh the upfront costs you incur before you commit to refinancing. Additionally, shop around to find the best rate with a provider you trust. It can be enticing to take the first low-interest offer that catches your eye, but pause for a moment and see what’s out there and what is best for you and your financial strategy. 

4. Make your year-end retirement account contributions. 

Have you maxed out your retirement accounts? As of 2020, the maximum annual contribution to your 401(k) sits at $19,500, unless you are 50 or older, in which case your maximum amount is $26,000. If you were to contribute that amount, you would be “maxing out” your 401(k). Contributing to retirement is an investment in your future. And, as an added bonus, your contributions lower your taxable income. 

5. Contribute to your health savings account (HSA). 

Like retirement contributions, HSA contributions lower your taxable income. This can be a great way to save for upcoming medical expenses, such as future copays, operations, and other medical-related expenses. As of 2020, the maximum contribution for individuals is $3,550, with families maxing out at $7,100. For those older than 55, you are allowed another $1,000 on top of each of those totals. 

6. Review any changes in tax law for the year in which you’re filing. 

Every year comes with a handful of changes that may or may not affect your year-end planning. Do your research to see what may have changed for your financial situation. You may find added benefits that you can take advantage of or even simple adjustments that you should be aware of before filing. To ensure that you understand how changes apply to you specifically, it’s wise to sit down with your financial planner. 

7. Talk to your financial planner. 

The year-end tips list could be endless. That’s why many rely on financial planners and tax professionals to prepare their year-end planning. The tax law has a myriad of nuances that could make a difference of thousands of dollars. Ensure that you’re trusting your financial strategy with a planner who focuses on your goals and a comprehensive set of tactics to help you reach them. 

8. Pause and practice a moment of gratitude. 

A whole year has gone by! How has your life changed? What are you most grateful for? What progress have you made? Year-end planning wraps our finances up in a shiny bow, and we can start to feel like that’s what our year boiled down to—how much we made and what the tax benefits were. Your year was so much more than that. Take a moment to look around and be thankful for what you have, without focusing on what you don’t. We find that practicing gratitude with our finances makes us more charitable donors, reduces our impulse spending, and decreases our financial worry. 

Need Some Year-End Tax Planning and Financial Guidance?

Your year-end tax planning could go off without a hitch with the right set of professionals on your side. Contact us today to schedule a consultation!

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Jeffrey T. Dobyns


President, SageSpring | Financial Advisor, RJFS 

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Beyond crunching numbers and investment strategies, at SageSpring, we’re about building relationships. When you encounter Founder & President of SageSpring, Jeff Dobyns, it’s easy to understand why this is at the very heart of who we are as a firm. You won’t find stuffy formalities with Jeff; instead, you can expect to find him sharing a warm smile, communicating a compelling vision, or patiently untangling life’s complex challenges with clients. He believes in truly getting to know clients, understanding their aspirations and priorities, and navigating their financial plans with a tailored, comprehensive approach. Our team members have often been caught taking notes on Jeff’s effortless relationship skills from a distance, and we admire them for striving to learn from one of the best. 

Jeff’s financial expertise and wisdom are the perfect match to his innate people skills. Jeff holds the prestigious CERTIFIED FINANCIAL PLANNERTM certification, Chartered Life Underwriter (CLU®), and Chartered Financial Consultant (ChLU®) designations, and has held executive positions with financial planning firms for more than two decades. 

His dedication extends beyond the office to the boardroom and the local community, where Jeff is passionate about giving back. He serves as Chairman of the Board of Men of Valor, a prison ministry and mentoring program. Jeff also serves on the board of Send Musicians to Prison, which shares hope, healing and restoration with the imprisoned through musicians & artists. Jeff actively supports other initiatives in the community by sitting on the board of The Signatry of Middle Tennessee and the Halftime Institute of Nashville. 

Witnessing his four children, Gracyn, Hunter, Tanner, and Logan, excel on the field is almost just as rewarding, if not more, than celebrating the victories of seeing his clients overcome obstacles and build wealth. Spending weekends boating on the lake, hiking mountain trails, and fishing with his family are the moments Jeff cherishes most. It’s this grounded perspective that reveals the true meaning of wealth for Jeff: not just numbers on a page, but the freedom to create experiences that enrich your life and the lives of those you love. When you choose the Dobyns McMillin Wealth Team, you choose more than financial expertise. You choose a partner who champions your dreams, celebrates your victories, and walks besides you on the path to achieving your unique goals.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER TM, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.