McCaleb Wealth Management

🎯 As the year winds down, here are 7 year-end tax ideas to consider:

1️⃣ Check your retirement contributions to your 401(k), IRA, and HSA limits. Are you hitting the limits?

2️⃣ Charitable giving: Have you considered donating appreciated securities and other options?

3️⃣ Investment portfolio review: Talk with your financial professional about any rebalancing that may be needed and if there are any tax-loss harvesting opportunities. This post is not a replacement for real-life advice. Consult your tax, legal, and accounting professionals before modifying your tax strategy.

4️⃣ Business owners: Now is a great time to review estimated tax payments and determine whether you need to purchase any equipment. Your tax professional may also help here.

5️⃣ Estate management check-up: Have you utilized annual gift exclusions? Is your trust funding on track?

6️⃣ Roth conversion opportunities: Have you analyzed potential long-term tax benefits?

7️⃣ Review required minimum distributions (RMDs): Don't forget inherited accounts!

Here are some housekeeping items to remember:

1️⃣ Once you reach age 73, you must begin taking required minimum distributions (RMDs) from your 401(k), IRA, or any other defined contribution plan in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.

2️⃣ If you spend your HSA funds on non-qualified expenses before age 65, ordinary income taxes may apply, and it may result in a 20% penalty. But, after age 65, you may be required to pay ordinary income tax if the funds are used for non-qualified expenses. Also, keep in mind that contributions are exempt from federal income tax but, in some cases, are not exempt from state tax.

3️⃣ To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a 5-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under certain other circumstances, such as the owner's death. The original Roth IRA owner is not required to take minimum annual withdrawals.

🕒 Questions? Your financial future is worth the conversation.

📢 Important update: The IRS has finalized regulations on the 10-year rule for inherited retirement accounts. Key points to understand:

1️⃣ Two versions of the rule:
➖ If the account owner dies before the Required Beginning Date (RBD), beneficiaries have 10 years to distribute the entire account.
➖ If death occurs after the RBD, beneficiaries must take annual distributions AND empty the account within 10 years.

2️⃣ The RBD is generally April 1st, following the year the account owner turns 73.

3️⃣ Good news: There's a penalty waiver for missed 2024 distributions.

Potential strategies to consider:
👉 Leaving retirement funds to beneficiaries in lower tax brackets
👉 Converting traditional IRAs to Roth IRAs
👉 Using Qualified Charitable Distributions for those over 70½
👉 Beneficiaries: Think about timing your distributions over the 10-year period to optimize your tax situation.

These changes may impact your long-term financial and estate strategies. It might be time to review your approach to see if it aligns with these new regulations and optimizes your legacy goals.

Some housekeeping items to remember: Once you reach age 73, you must begin taking Required Minimum Distribution (RMDs) from a traditional IRA in most circumstances. Withdrawals from traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a 5-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under certain other circumstances, such as the owner's death. The original Roth IRA owner is not required to take minimum annual withdrawals.

Questions about how this impacts your specific situation? Let's discuss. 👇

🎁 Did you know last year, on Giving Tuesday, U.S. Donors gave $3.1 billion, according to a 2024 report by Neon One?

1️⃣ What is Giving Tuesday?
▪️ A global movement celebrating generosity
▪️ Follows Black Friday and Cyber Monday
Encourages giving back to causes you care about

2️⃣ Why it matters:
▪️ Neon One said 34 million adults participated last year
▪️ Supports countless charities and communities worldwide

Giving Tuesday reminds us of the power of collective generosity.

Questions about how to incorporate charitable giving into your financial strategy?

💬 Let's chat

🤔 Did you know there are TWO different Medicare enrollment periods? Many don't!
Here's what you need to know:

1️⃣ Annual Election Period (AEP): Ends Dec. 7, 2024 🚨
▪️ For ALL Medicare beneficiaries
▪️ Change plans, switch between Original
Medicare and Medicare Advantage
▪️ Changes effective January 1, 2025

2️⃣ Medicare Advantage Open Enrollment (MA OEP): Jan. 1 - Mar. 31, 2025 🚨
▪️ ONLY for those already in Medicare Advantage plans
▪️ Switch plans or return to Original Medicare
▪️ Changes effective the following month

What you should do:
✅ Review your current coverage NOW
✅ Compare plans on Medicare.gov
✅ Make changes during AEP if needed
✅ Consider using MA OEP as a second chance if you're unhappy with your Medicare Advantage plan

Take action before December 7 to help align your coverage for your needs in 2025.

Questions about how Medicare fits into your financial picture? 💬 Send a message before the deadline!