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Retire Wise | December 2022

Retire Wise | December 2022

| December 13, 2022
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Don’t Miss These Key Year-End Tax Deadlines

The holiday season can be a busy and hectic time of year. That can make finding time difficult to focus on year-end tax deadlines. However, missed opportunities can be costly and affect your future well-being for years to come. To end the year on the right financial footing, take time now to review the checklist below. Then work with your tax and financial professionals to implement the right strategies for your situation.

Keep these year-end tax deadlines top of mind1

  • Offset capital gains through tax-loss harvesting (be sure to avoid violating wash sale rules)
  • Contribute to a health savings account (HSA) if you are not enrolled in Medicare and have a qualifying high deductible health plan (HDHP)
  • Take your required minimum distributions (RMDs) if you’re age 72 or over2
  • Consider if a Roth conversion is right for you. December 31 is the last day to convert a traditional IRA to a Roth IRA for the 2022 tax year.
  • Work with your tax professional to help reduce your alternative minimum tax (AMT) liability, if applicable
  • If you will itemize on your 2022 return, determine if you can accelerate deductions into this tax year, such as qualified unreimbursed medical expenses; deductible amounts must exceed 7.5% of your adjusted gross income for 2022
  • Fund charitable giving with cash donations and/or appreciated stock
  • Make annual gifts (the annual gift exclusion amount for 2022 is $16,000 per recipient for individual taxpayers, $32,000 for married couples filing jointly. While there is no limit on the number of recipients you can gift to, any gift above the exclusion amount is subject to taxes.
  • Consider a qualified charitable distribution (QCD) from an IRA, up to $100,0003
  • Fund 529 education savings plans for your beneficiaries

If you’re still working:

  • Maximize contributions to employer-sponsored retirement plans, such as 401(k) and 403(b) plans. (Remember, you have until April 18, 2023, to make IRA contributions for tax year 2022.)
  • Review your income tax withholding and make any necessary adjustment for 2023

Keep in mind, this is not a complete list of year-end tax strategies. To learn more about managing taxes in retirement, meet with your tax professional or contact the office anytime.

1 All deadlines are December 31, 2022, unless otherwise noted.
2 For the first year following the year you reach age 72, you will generally have two required distribution dates (April 1 and December 31). For each year after your required beginning date, you must withdraw your RMD by December 31. Visit IRS.gov for specific rules and deadlines.
3 Strict rules apply. Consult with a tax professional before initiating a QCD.

How Practicing Gratitude Invites Greater Happines

Did you know that spending a few minutes each day practicing gratitude can have a powerful emotional impact, creating greater feelings of happiness, fulfillment, and satisfaction? In fact, studies have found that those who took time to reflect on or express gratitude:1

  • Felt more positive
  • Enjoyed stronger relationships
  • Felt better equipped to deal with adversity
  • Saw improvements in their health
  • Were more satisfied with their lives

In one study, researchers asked participants to write a few sentences each week, focusing on particular topics. One group wrote about things they were grateful for that had occurred during the week. A second group wrote about daily irritations or things that had displeased them. The third wrote about events that had affected them (with no emphasis on them being positive or negative). After 10 weeks, those who wrote about gratitude were more optimistic and felt better about their lives.

Researchers were surprised to learn that they also exercised more and had fewer visits to physicians than those who focused on sources of aggravation.Other studies looked at how being grateful can improve relationships. For example, a study of couples found that individuals who took time to express gratitude for their partner not only felt more positive toward the other person but also felt more comfortable expressing concerns about their relationship.2

Thankfully, there’s no right or wrong way to practice gratitude. It’s simply about what works for you. If you’re looking for ways to incorporate more gratitude into your life, consider the following, based on your personal beliefs and preferences:

  • Keep a gratitude journal where you write about the people, things, or experiences you are grateful for
  • Walk or ride your bike outside to appreciate nature
  • Pray or meditate
  • Listen to your favorite music
  • Volunteer for an organization you are passionate about
  • Notice the little things, such as a meal someone prepared, a kind gesture, or a smile
  • Give people the benefit of the doubt, you never know what others may be going through
  • Pay it forward through small acts of kindness
  • Thank someone

Thank you for your trust as we continue working together towards your financial goals. Continuing to support you is a top priority, and a privilege. If you ever have questions or concerns, contact the office.

1 “Giving thanks can make you happier.” Harvard Health Publishing, 14 Apr. 2021, https://www.health.harvard.edu/healthbeat/giving-thanks-can-make-you-happier.
2 Ibid.

Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer's official statement and should be read carefully before investing. Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state's 529 Plan.

This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.

Cetera Financial Group” refers to the network of independent retail firms encompassing, among others, Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Investment Services LLC (marketed as Cetera Financial Institutions or Cetera Investors), and Cetera Financial Specialists LLC. All firms are members FINRA/SIPC members. Located at: 655 W. Broadway, 11th Floor, San Diego, CA  92101.

Individuals affiliated with Cetera firms are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.

This communication is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.

Some IRA's have contribution limitations and tax consequences for early withdrawals. For complete details, consult your tax advisor or attorney.

Distributions from traditional IRA's and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty. Converting from a traditional IRA to a Roth IRA is a taxable event. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first-time home purchase (up to a $10,000lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.

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