What a year 2024 has been! I can hardly believe we are in the 4th quarter and preparing for important year-end initiatives. The end of the year brings much anticipated holiday cheer and cooler weather, but it also brings important deadlines, considerations, and planning for 2025. My hope is to highlight a few upcoming deadlines and decisions to help you be prepared to enter into the new year!
Federal and State Voluntary Withholding: If you opt in for Federal and State Voluntary Withholding, it is important to consult with your financial professional regularly to ensure that withholdings on distributions have been properly applied. Another important aspect of Voluntary Withholding is that if you have had a change of address in 2024, you must notify your financial professional to ensure that no other updates are needed for your withholding amounts.
Required Minimum Distributions (RMD): RMDs are required from certain tax-deferred retirement accounts after reaching the age of 73. The deadline for RMDs is December 31st of the current year or April 1st of the year following after you reach age 73. To estimate your required minimum distribution for the year, try out our RMD calculator here! Please understand this calculator only provides estimates, please contact your financial professional to determine your correct requirement.
Gifting: What better time to give back than the holidays! Especially with "Giving Tuesday" coming up on December 3rd of this year, charitable giving is a great way to positively impact your current tax position. If interested in giving more this season, contact your financial professional to ensure a smooth and accurate process. "It is better to give than to receive." Acts 20:35
Roth Conversions: You may already be aware of the benefits of Roth IRAs: tax-free withdrawals (providing certain conditions are met), no required minimum distribution (RMD), and tax diversification. Keep in mind, everyone has a different financial strategy and the account amount is typically subject to income taxation. Be sure to reach out to your financial professional to determine if switching your Traditional IRA over to a Roth IRA is the right move for you. If you are wanting to proceed with a conversion, remember to submit your request by December 6th to ensure the request can be processed by December 31st. Conversions from a Traditional IRA to a Roth IRA are irreversible.
IRA Distributions: To process distribution requests by December 31st, the completed request form is due by December 6th.
While this may seem like a lot to undertake in the next few months, remember that we are here to help. If you are looking to get in contact with a financial professional, please contact us. We would be happy to have a conversation with you and help you put your best foot forward in 2025.
Now that we've outlined some key considerations for the rest of the year, I hope you can rest and enjoy all that the holiday season will bring for you and your family!
Source: LPL Financial
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC
Harvest Point® Wealth Management and LPL Financial do not provide specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.