Guide to 2019 Year-End Financial Planning

With January right around the corner, there are a few key financial planning items that you may want to consider before year-end, particularly in light of recent changes enacted by the Tax Cuts and Jobs Act of 2017 (TCJA).

Talk with a tax advisor and your Regions Private Wealth Management team to see if these action items can enhance your overall financial position.

1. Retirement Planning – Maximize Your Contributions

For 2019, the annual contribution limit for 401(k) plans was increased to $19,000. For individuals 50 and over, there is a $6,000 "catch-up" allowance, which increases the 401(k) contribution limit to $25,000. The amount you can contribute to an IRA was increased to $6,000 in 2019 (with a $1,000 "catch-up" for individuals 50 and over). Keep in mind, your IRA contribution may not be deductible depending on your adjusted gross income (AGI).

If you plan to contribute to other retirement plans, consult with a tax advisor and your Regions Private Wealth Advisor on current contribution limits.

Wealth Insights Resources: Designing a Retirement Income Plan, Retirement Spending: What Can You Expect?, and Your Retirement Road Map

Action: Talk to a tax advisor and your Regions team to determine whether you are maximizing your contributions.

2. Investment Review – Managing Taxable Gains in Your Portfolio

There may be a bright side to selling an investment for a loss. Investors that have sold investments that have lost value may be able to offset federal taxes on capital gains in their portfolios. This strategy is known as “tax loss harvesting.”

Wealth Insights Resources: A Less-Taxing Investment Approach and

Stepping Up On Capital Gains Taxes

Action: Talk to a tax advisor and ask your Regions team to review your portfolio before year-end to look for potential tax harvesting opportunities.

3. Income Tax Considerations – Tax-Planning Considerations

The end of the year signals an opportunity to review your tax plan and look for opportunities to maximize tax savings. Two key changes created by the TCJA are the $10,000 limit on state and local tax (SALT) deductions, and the much larger Standard Deduction, which was increased in 2019 to $24,400 for a married couple filing jointly.

Wealth Insights Resources: Wealth Management & the New Tax Landscape and Charitable Donations: Give Your Giving a Boost

Action: Meet with your tax advisor to discuss income tax planning opportunities in conjunction with your full tax plan.

4. Philanthropic Planning

Philanthropic planning allows you to enhance your current strategic plan by providing direction to meet charitable intentions. Philanthropic planning may also offer significant tax benefits and is one of a few remaining ways to increase your level of itemized deductions. You may make end-of-the-year gifts outright to charity, into trust, or to another charitable entity such as a donor-advised fund. Another tax-efficient option is a gift of appreciated stock or property, which may allow you to bypass the long-term capital gains tax and increase the impact of the gift.

Wealth Insights Resources: Giving Trends: How Americans Give Money

Action: Talk with a tax advisor and your Regions team to review potential philanthropic opportunities before the end of the year.

5. Annual Gifting (Maximizing the “Annual Exclusion”)

As of 2019, individuals can gift up to $15,000 to as many individuals as they’d like without paying gift tax. In turn, it may be beneficial to consider year-end gifts to family or other intended heirs, if fully utilizing your annual exclusion is consistent with the objectives of your strategic plan. For children, common gifting “destinations” include funding a 529 Plan or Coverdale account to provide for qualified education expenses.

Wealth Insights Resources: Understanding the Value of 529 Education Plans

Action: Discuss any prior gifting you have made this year with your Regions team and your tax advisor to determine if additional gifting ultimately would be beneficial to you.

6. Estate Planning

The TCJA increased the lifetime estate tax exemption to $11,400,000 in 2019, creating a window of opportunity for you to remove assets from your estate in a tax-efficient manner. The current lifetime exemption threshold is currently scheduled to “sunset” and revert to the pre-TCJA amount starting January 1, 2016.

Wealth Insights Resources: Getting a Hand for Business Succession and Estate Planning and Charitable Trusts: What You Should Know

Action: A review of your current estate plan in conjunction with your wealth strategic plan is a practical year-end exercise. Discuss with your Regions team and tax advisor future strategies to maximize the use of your available lifetime gift and estate tax exemption.

This presentation is intended to provide general information about Regions Private Wealth Management. Regions Bank does not provide legal or tax advice. Applicable laws change frequently and the strategies suggested may not be suitable for everyone. Individuals should consult their tax and/or legal advisors concerning planning recommendations which may have a legal or tax impact. Certain sections may contain forward-looking statements that are based on reasonable expectations, estimates, projections and assumption, but forward-looking statements are not guarantees of future performance and involve risks and uncertainties, which are difficult to predict.


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