End-of-Year Financial Planning 

As we step into the final quarter of the year, there is no better time than now to have some sort of financial review. The three months left in 2021 are enough for you to utilize some financial planning strategies and maximize your wealth planning for the year. Moreover, it’s also an excellent time to review some of the new year financial resolutions you set for yourself at the beginning of the year. We understand that, to some people, three months may sound like plenty of time and there’s certainly no rush to get it done. However, the holidays come up quickly, and you wouldn’t want to be one of those people scheduling last-minute appointments with their advisors and accountants. So, start now and relax later. 

Spend Money in Your Flexible Savings Account 

As a taxpayer, you already know that you can contribute a maximum of $2,650 to a Flexible Spending Account. And while a lot of people do contribute to this account, not many get the chance to use up this money. So, what’s so attractive with the Flexible Savings Account? First, you don’t pay taxes on these accounts, and one can use these funds to pay for medical, optometry, or dental expenses. However, you must spend this money by the end of the year or risk losing it. Most people know this is the case and still wait for December to spend the money in the Flexible Account. What happens is that doctor’s and dentist appointments are often fully booked, and the ones that aren’t will probably not guarantee high-quality care. So, take this chance to take care of your health-related bill to avoid losing the benefit.

Tax-Loss Harvesting

If your portfolio is diversified to any extent, most likely, some of your investments will have gains, and some will have losses. And if you have capital gains, you will have to pay capital gains tax on those gains at the end of the year. But, if you have offsetting losses in your portfolio that could be sold by year-end, you could minimize the capital gains tax liabilities on your winning accounts by selling your losing accounts. Nonetheless, tax-loss harvesting is a tricky undertaking and we, therefore, recommend you consult with your tax advisor or accountant before making any drastic moves.