Yearly Archives: 2022

2022 Year-End Checklist


The holiday season is in full swing, which means most of us are concerned with buying gifts and preparing to host family. If you can spare some time, however, it can be a very important time to think about checking off a few financial to-do items as well. Here are a few reminders on how to wrap up this year with a nice big bow and start the new year out on the right foot!

Don’t Forget to Take Your Required Minimum Distribution (RMD)

If you are 72 or older, or if you inherited an IRA from a family member, you will likely need to withdraw a percentage of your IRA before the end of the year. Your withdrawal amount depends on a number of factors, so check with us if you think this applies to you.

If you don’t need your RMD to fund your lifestyle, you may want to gift it to charity via a Qualified Charitable Distribution (QCD) and skip paying the tax. A QCD is an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70½ or over that is paid directly to a qualified charity.

Gift to Charity

If you itemize, making tax-deductible charitable contributions before year-end could reduce your 2022 liability. Deductible gifts to public charities, including donor-advised funds, are limited to 30% of adjusted gross income (AGI) for contributions of non-cash assets if the assets were held for one year, and 60% of AGI for contributions of cash. Contribution amounts in excess of these limits may be carried over up to five tax years.

Some donors may estimate the total of their itemized deductions will be below the level of the standard deduction. In this case, it could be beneficial to “bunch” your 2022 and 2023 charitable contributions this year at a level that will allow you to itemize. A Donor Advised Fund is a useful tool if you would like to make a larger gift but have not yet determined which charities will receive the funds.

Roth Conversions

A very useful strategy to combine with those larger charitable gifts is to convert all or a percentage of your pre-tax IRAs to a Roth IRA. Roth IRAs grow and are distributed free of tax, unlike traditional IRAs, and not subject to RMDs, which allows for greater tax planning flexibility in retirement.

Check Your Retirement Plan Elections

Each tax bracket will expand next year. For example, the 35% bracket will cover an additional $45,900 for those married filing jointly. In addition, several key retirement plan maximums will increase for 2023, so it’s a good time to check your withholding elections. 401(k) plan contribution limits will increase from 20,500 to $22,500, plus another $7,500 for those 50 +, for a combined total of $30,000. IRA contribution limits will increase from $6,000 to $6,500, but the catch-up will remain at $1,000.

Good luck with your final preparations for a lovely holiday!

Whitney Butler