Year-End Tax & Investing Tips. No Dumb Questions with Connell McShane and Doug Flynn, CFP. Ep. 5

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Connell and Doug discussed year-end tax planning strategies, including the benefits of selling off "losers" in investment portfolios to save on taxes and setting up a self-employed retirement plan. They also emphasized the importance of considering tax implications when making investment decisions, such as selling stocks with gains to offset losses. Additionally, they discussed the tax implications of gifting money to family members and the potential benefits of prepaying property taxes.

Year-End Tax Planning Strategies

In this episode of the podcast, Connell and Doug discuss year-end tax planning strategies. They emphasize the importance of considering 401(k) contributions, especially for those receiving year-end bonuses or extra taxable income. They also discuss the benefits of setting up a self-employed retirement plan, such as an individual 401(k), before the end of the year. Additionally, they advise on selling off "losers" in investment portfolios to save on taxes and taking inventory of one's portfolio. They caution against the 30-day "wash sale rule" when selling securities.

Managing Investments and Tax Implications

Doug and Connell discussed strategies for managing investments and tax implications. Doug explained the process of offsetting losses against gains, and the possibility of carrying over losses to future years. He also highlighted the importance of recognizing and booking losses, particularly in cases of worthless securities. Doug further discussed the strategy of selling stocks with gains to offset losses, allowing for a reset of the cost basis and potentially lower future tax liabilities. Connell agreed with Doug's points and emphasized the importance of considering tax implications when making investment decisions.

Year-End Tax Strategies and Giving

Doug and Connell discussed year-end tax strategies, focusing on capital gains tax treatment, selling gains against losses, and bunching up deductible expenses. Doug emphasized the importance of consulting with an advisor before the end of the year to optimize tax benefits. They also touched on the topic of charitable giving, with Doug noting that people are motivated by tax breaks, but also suggesting that giving to charity should be done regardless of tax benefits. Lastly, they briefly discussed the gift tax limit and its implications for giving away assets during the year-end.

Tax Implications of Family Gifts

Doug and Connell discussed the tax implications of gifting money to family members. Doug explained that each person can gift up to $18,000 per year without filing a gift tax return, and the husband and wife can each give this amount to their children. Doug also advised that gifts should be made in cash to avoid potential tax issues. Connell agreed, noting that while the tax implications may not be significant for most people, it's still important to consider them. Doug also suggested that new homeowners could potentially prepay their property taxes to take advantage of the tax deduction in the current year.

Podcast Success and Tax Tips

Connell and Doug discussed the success of their podcast, particularly the latest episode which they found to be their best yet. They emphasized the importance of considering tax implications when making financial decisions, such as buying a house. They also encouraged listeners to leave comments with future podcast topic suggestions. They mentioned that they will be posting about the podcast on various platforms and that tax tips will be featured in upcoming episodes.

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