What to Pay Attention to Now
Here are the top recommended Financial Calendar items with Key Dates to pay attention to for tax and financial planning.
January
Increase Your Retirement Savings
The amount you can contribute to your Roth or Traditional IRA is $6000 for 2020 ($7000 if you’re 50 or older). 401(k) and 403(b) limits have increased. Consider increasing your automated contribution amount to max out your account. At the very least, try to contribute up to the point where you take advantage of any available employer match. If you’re not maxing out your 401(k), increase your contributions by 1% (or your IRA by $100 per month). While it doesn’t seem like a lot now, compound interest may work to your advantage, so that the small percentage increase pays off down the road! If you got a raise, increase your contributions even more.
Automate Your Savings
If you’re not automating your retirement contributions, start now. Seriously. It’s one of the easiest ways to make sure that you get on track for retirement, and you won’t be tempted to spend the money if it’s automatically transferred to your account.
Use Your Year-End Bonus Wisely
If you didn’t max out an IRA last year, you have until April 15th to do so, so consider this, too.
Medicare
Medicare General Enrollment Period starts Jan. 1 (ends Mar. 31) If you missed your Initial Enrollment Period, or Special Enrollment Period, use this chance to sign up for Medicare Parts A & B. Coverage will start July 1.
Not to be confused with the Annual Election Period (AEP), the Medicare Open Enrollment Period (OEP) allows you to make a one-time change.
You can change from one Medicare Advantage plan to another Medicare Advantage plan. You can also leave a Medicare Advantage plan and return to Original Medicare (and a Part D drug plan). Be careful though. This period does NOT guarantee you a free pass into a Medicare supplement to go alongside your Original Medicare.
If you wish to enroll into a Medicare supplement, you will have to apply for it and answer health questions in most circumstances. The Medigap company will underwrite you to determine your health risk. They can turn you down for the coverage based on your health history, and then you would have only Original Medicare.
Required Minimum Distributions (RMDs)
If you’re over 70 1/2 (or will be) plan your RMD’s for the year.
January 15th
Estimated Tax Payment Due
Fourth-quarter estimated tax payments for last year are due for self-employed people or others who don’t pay enough through paycheck withholding. Use Form 1040ES, “Estimated Tax for Individuals.”
February
Get Organized for Tax Season
By the end of January, you should have received tax forms, like your W-2 from your employer or 1099s. Organize them, as well as any other information you’ll need, including records of charitable donations and other receipts you’ll use when itemizing deductions.
Schedule a review with your financial advisor
Haven’t talked to Greg in a while? Is it time? Schedule with Greg here.
Corrected 1099
Certain mutual funds could restate their distribution information after your initial Form 1099 is mailed to you at the end of January. Though not common, when such fixes are necessary a corrected 1099 is usually mailed sometime in the month of February.
Medicare
Medicare General Enrollment Period continues. (See Note in January)
March
Finish Your Taxes
Aim to wrap up your taxes in March–-well ahead of the April 15th deadline.
Check Your Credit Report
Get a free annual copy of your credit report, www.annualcreditreport.com, from one of the three major reporting agencies on a rotating basis (about every 4 months).
March 15th
Corporate Taxes
Corporate Small Business Owner? Corporate taxes are due March 15th.
March 31st
Medicare
Medicare General Enrollment Period deadline is March 31st. (See Note in January)
April
April 1st
Required Minimum Distributions (RMDs)
You have until April 1 (of the year immediately following the year you turn 70 1/2) to take your first required minimum distribution from a 401(k) or IRA. But delaying your first distribution could result in a significantly higher tax bill.
April 15th
File Taxes
No more procrastinating: Make sure that you file your taxes by the drop-dead date of April 15th. If you’re planning to ask for an extension (until October 15th), the due date is also April 15th!
Estimated Tax Payment Due
First-quarter estimated tax payments are due for self-employed people or others who don’t pay enough through paycheck withholding. Use Form 1040ES, “Estimated Tax for Individuals.”
IRA & Roth Contributions – Last Day
The deadline for filing your taxes is also the last day you can make an IRA contribution that will apply to the previous year’s tax return
May
Financial Planning
You’ve finished your taxes. Congratulations! What financial planning needs to be updated or changed?
Investments
How are they doing? Have you reviewed them lately? Do you have a systematic process? Are you managing your investment risk wisely?
May 15th
Non-Profit Tax Deadline
Deadline for non-profit organizations to file Form 990 for the year 2020 or to request an extension with Form 8868.
June
Review Your Social Security Earnings
Retrieve your current Social Security benefit statement and make sure last year’s earning have been recorded correctly. Not sure how? Click here.
June 15th
Estimated Tax Payment Due
Second-quarter estimated tax payments are due for self-employed people or others who don’t pay enough through paycheck withholding. Use Form 1040ES, “Estimated Tax for Individuals.”
June 30th
FAFSA Deadline
The federal deadline for 2019-2020 Free Application for Federal Student Aid (FAFSA) online applications. However, each state, along with many colleges and universities, have different financial aid application deadlines, so be sure to create a checklist for all the schools you’ve applied to track when their application materials are due.
July
401(k) and 403(b) Review
Are you contributing enough for the year? Are you receiving all of the match you’re entitled to? At the very least, try to contribute up to the point where you take advantage of any available employer match. How are your investments performing? Can you increase your contributions?
Check Your Credit Report
Get a free annual copy of your credit report www.annualcreditreport.com from one of the three major reporting agencies on a rotating basis (about every 4 months).
Scholarships and Internships
Many scholarship or paid internship programs have deadlines in July.
August
Take a Vacation!
The summer will be over soon. If you haven’t fit this in yet do it now.
Schedule a Review with Your Financial Advisor
Haven’t talked to Greg in a while? Is it time? Schedule with Greg here.
College Deadlines
Many colleges and universities have deadlines for varying summer semester or quarter terms, so be sure to check with specific education programs and not miss crucial payment or registration deadlines.
September
Review Your Life Insurance.
Too many buy insurance and forget to review it. Take some time and make sure your coverage is adequate.
Start Thinking About Year-End Tax Planning
Call your CPA or a tax professional to make sure that you’ve been withholding enough on your taxes, and find out if there are any additional steps that you can take now to reduce your tax bill.
September 15th
Estimated Tax Payment Due
Third-quarter estimated tax payments are due for self-employed people or others who don’t pay enough through paycheck withholding. Use Form 1040ES, “Estimated Tax for Individuals.”
October
Review Your Estate Planning Documents
The right estate planning could save you and your loved ones a lot of time and heartache in the event of a tragedy. Make sure that you have a living will (also known as a health care directive) set up and review the beneficiary forms on your retirement accounts. If you have a will review it, if you don’t make it a priority to get one before the end of the year. If you have minor kids, you’ll want to name a guardian for your children (one of the hardest parts of the process for many of us!).
Start FAFSA
If you have students entering college next year, begin your financial aid application with FAFSA. Here is where you start: https://fafsa.ed.gov/
Establish SIMPLE Plan
Final deadline for self-employed persons or small employers to establish a SIMPLE-IRA.
October 15th
Tax Day (again!)
This is Tax Day for those who got automatic six-month extensions using Form 4868. File your Form 1040, 1040A, or 1040EZ and pay any taxes, interest and penalties due by midnight to avoid problems with the IRS.
Medicare Annual Election Period (AEP)
The most common time of year to change your Medicare Advantage plan is during the fall Annual Election Period (AEP) in the fall (October 15 – December 7). This period is specifically designated for changes to Medicare Advantage and Part D drug plans. That’s because your current plan always has benefit changes for the upcoming year. If you get your Annual Notice of Change letter in September and you don’t like the upcoming changes you can use the Annual Election Period to switch. Your changes during this period will take effect on January 1st.
November
Review Your Long-Term Care Plans
If your 50 or older, it’s time to be considering how you would handle a long-term care event. There are many options to consider — not just insurance. If you’re not sure how, get help.
Required Minimum Distributions (RMDs)
If you’re over 70 1/2 and haven’t taken your RMD for this year begin the process now.
Check Your Credit Report
Get a free annual copy of your credit report www.annualcreditreport.com from one of the three major reporting agencies on a rotating basis (about every 4 months).
Financial Aid Deadlines
There are many student financial aid deadlines that occur throughout the month, so double-check with the specific school.
Consider a Roth Conversion
One of the most powerful performers in the 2nd Half is tax-free income. A conversion must be completed by December 31.
Medicare
Medicare Annual Election Period continues. (See Note in October)
December
Consider Gifting
Should you be making family or charitable gifts before the end of the year?
December 7th
Medicare
Medicare Annual Election Period continues until December 7th. (See Note in October)
December 31st
Required Minimum Distributions (RMDs)
If you are over 70 1/2 make sure you take your RMD’s by the end of the year. Most required minimum distributions from retirement accounts (except for the first one) must be taken by December 31 annually to avoid the 50% tax penalty.
401(k) 403(b) Contributions
You generally need to make 401(k) 403(b) contributions by December 31 each year.
Set Up a Solo 401(k)
Last day for self-employed persons to set up a solo 401(k).
Marital Status
Keep in mind the marital status listed on this date determines your marital status for the whole year.
#2ndHalfWealth 1-804894
