Our house has been a mess for the past week. As is our custom after Thanksgiving, we crawled into our attic last Saturday to retrieve the Christmas tree (allergies in our house consign us to the artificial variety) and about half a dozen boxes that contain the decorations that will adorn the inside of our home for the next month or so. It takes a few days to get all of that out and arranged just so.

We also received our first holiday card in the mail and year-end party invitation in the inbox. Black Friday and Cyber Monday came and went, and there are already boxes of presents piled in the corner of my office. Ready or not, the holiday season is upon us.

With so many distractions this time of year, you may think that personal finance would be the last thing on people’s minds. However, taking a little time to add some personal finance “To Do’s” to your year end list could be the best present you could get for yourself or loved ones this year.

12/31 Deadlines

December 31 not only marks the end of the year, it also is the last day that many financial transactions can count towards 2017. At best, it can represent a lost opportunity. At worst, it can cost you a lot of money:

Charitable Donations -  If you want to be able to deduct a gift to charity from your 2017 taxes, it needs to take place before year-end. With tax reform proposals set to double the standard deduction while eliminating many other ones, giving more this year may maximize the tax breaks for your philanthropy. Setting up a Donor Advised Fund to receive gifts of cash or appreciated securities probably makes more sense than ever.

401(k) Salary Deferrals – If you haven’t maxed out your contributions to your 401(k), there may still be time to adjust your contributions, especially if you are self-employed or have a big paycheck coming before year-end. The 2017 limits are $18,000 (or $24,000 if you are age 50+).

Spend Your FSA – If you have a Flexible Spending Account (FSA), you must spend it during the calendar year or you will forfeit all but $500. Use it or lose it!

Increase your HSA Contribution – If you have a Health Savings Account, you can contribute up to $6,750 (plus another $1,000 for age 50+) this year for your family. The contributions are pre-tax (and pre-FICA if made through your company’s plan) and grow tax free. Best of all, ALL unspent funds can accumulate year over year. The HSA must be paired with a High Deductible Healthcare Plan, so you may have to wait until your next annual enrollment if not already participating.

Establish a Retirement Plan – If you own a business and want to establish a retirement plan (i.e. a Solo 401(k) Plan or Defined Benefit Pension Plan), it must be set up before the end of the year. As already mentioned, any salary deferrals must also be made before year-end. However, company contributions can be made through your tax filing deadline, including extensions.

Harvest Losses – There haven’t been a lot of losing investments in 2017, but if you have some, now may be a good time to sell for a loss. You will have to wait 30 days to repurchase the sold security (or substantially similar alternative) to avoid the loss being disallowed as a “wash sale”, but you can reinvest the proceeds in a different investment. This may allow you to offset other taxable gains or even claim a tax deduction. With some of the proposed tax reform changes, 2017 may be the last year this tax planning technique is even an option.

Required Minimum Distributions – Did you turn 70.5 in 2017? If so, then you may need to take a required minimum (RMD) distribution from your IRA or retirement account. If 2017 is your first RMD year, you are allowed a 3-month grace period until April 1, 2018 to make the distribution. However, you will still need to take the 2018 RMD by year end. If you are close to the next tax bracket, this doubling up can lead to paying more taxes than you otherwise would have had you taken your ’17 RMD in ’17.

It’s also worth making a call to your investment company or bank if you have an automated distribution scheduled before year-end, just to make sure everything is in good order. If you miss an RMD for any reason, the penalty is 50%!

Less Urgent but No Less Important

Check Your Beneficiaries – Did you name your brother as a beneficiary on your first IRA? How about your first spouse on a life insurance policy? These are just a couple of examples of situations I’ve encountered where a grieving spouse (or kids) haven’t received payouts they were expecting. A few minutes now can save a lifetime of pain.

Start a 529 Plan – If you have kids or grandkids, a gift into a 529 college savings plan can be a great investment in their future. Even better, the funds grow tax-free. For those that may be considering substantial gifts, there is a unique feature that allows for superfunding up to five years’ worth of annual gifts. Anyone can gift up to $14,000 this year to as many people as you please without triggering any gift taxes, but with this unique feature, that amount multiplies by five to $70,000 (or $140,000 for two people) in 2017.

Give an IRA – If your child or grandchild has any earned income, consider making an IRA contribution for them. One of the great ironies of investing is that by the time you have money, frequently you are short on time. Conversely, when you have nothing but time, money can be hard to come by. A high schooler with a summer job or recent college graduate is probably more focused on making ends meet than their retirement plan, but they stand to gain the most by investing. $1 invested for 40 years earning around the historical return for stocks would grow to over $30 (past returns not indicative of future returns, yada, yada, yada). Make it a Roth IRA and all the growth will be tax-free!

Of course, the most important item to add to your list is to cherish the time with family and friends this holiday season. If any of these topics come up while sharing wassel or eggnog, please pass along these tips. In the spirit of the holidays, for each new subscriber to the Accountable Update, I’ll make a $1 gift to charity. As always, if you or someone you know need help, get in touch.