Year-end planning in year with lots of change?

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mud
Posts: 83
Joined: Mon Feb 21, 2011 8:20 pm

Year-end planning in year with lots of change?

Post by mud »

Wife is fully employed, I left my job at the end of June and will not enter another job before the end of the year. We have already done max contributions to our Roth IRAs, Wife maxes contribution to 401k at work, I did the same with Simple IRA while I was employed. I have an HSA and HDHP, HSA contribution maxed out for the year. Most of our funds are in a simple portfolio at Vanguard, with some funds in individual stocks at Scottrade. Details about our finances here: http://www.bogleheads.org/forum/viewtop ... =1&t=82664 , and most of those numbers there are still generally accurate, although some of the changes recommended by posters in that thread have been made (her roth moved to vanguard, and mortgage refinanced to 4% with a balance of about 98k, etc.).

I have a little freelance income (probably under 9k), and probably about 6k in deductible expenses to offset some of that income. This type of income has been highly variable in years past, always under 10k, but some years as little as 2-3k.

I'm wondering if there's anything I should consider doing before years-end given that our overall earnings this year will be probably 25-35% lower than last year? Don't know if it makes sense to try and open some sort of self-employed IRA to mop up the 3k freelance profit that I'll realize for the year, or to make any other moves in our portfolio, etc. I think we're in pretty good shape overall, but don't want to miss any big opportunities if they exist.

I am considering looking into getting us some term life insurance before the end of the year (thinking about starting a family in the next year or so), though I know that doesn't have tax implications.

I welcome any general or specific thoughts you folks have. Thanks!
Johm221122
Posts: 6393
Joined: Fri May 13, 2011 6:27 pm

Re: Year-end planning in year with lots of change?

Post by Johm221122 »

I've read your post twice, nothing I see off hand.Hope this bumps you up.I'll let you know if I think of anything
John
Johm221122
Posts: 6393
Joined: Fri May 13, 2011 6:27 pm

Re: Year-end planning in year with lots of change?

Post by Johm221122 »

"Some funds in individual stocks" OP
From other post your in 15% tax bracket
time to sell individual stocks ?
John
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bottlecap
Posts: 6906
Joined: Tue Mar 06, 2007 10:21 pm
Location: Tennessee

Re: Year-end planning in year with lots of change?

Post by bottlecap »

The real question is what will your taxes (or rather, tax rate) be compared to next year - you can't do anything about last year.

If you are in the 15% bracket and expect your marginal tax rate to rise (or if you expect the capital gains rate to rise regardless of your marginal rate), it would be smart to realize capital gains before the end of the year, assuming it doesn't impact any other eligibility, aid or credits you might receive.

If you expect your marginal rate on income to be less next year, or if you want to maximize your deductions for whatever reason, you could consider paying your real estate taxes early, especially if your 2012 RE taxes aren't due until sometime in 2013. You could also prepay your January mortgage payment in December, so that the interest due on Jan 1 pay gets credited for this year.

Of course, if you expect your tax rate to be higher in the future, now might also be a good time to consider a Roth-type contribution, although you have until April 15th to do that.

JT
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