Last week, we crawled into our attic 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. Today, the lights went up on the outside of the house.

We have already received our first Christmas card in the mail and even attended our first holiday party last weekend. Ready or not, the holiday season is upon us.

If you are like me, you have a long list of things to do over the coming weeks. If you are like just about everyone else, you probably don’t have personal financial tasks at the top of your list. While there are always a few things we should all do, with recent market volatility and the passage of The Tax Cuts and Jobs Act, there may be some items that differ from past years.

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 2018. 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 2018 taxes, it needs to take place before year-end. Tax reform doubled the standard tax deduction for this year and it eliminated many other ones. It may make sense to bunch your giving more in years that your itemized deductions will add up to more than the standard deduction. Setting up a Donor Advised Fund to receive gifts of cash or appreciated securities probably makes more sense than ever.

Salary Deferrals – If you haven’t maxed out your contributions to your 401(k), there may still be time to adjust your contributions. While it may be too late to do anything to make adjustments in a company plan that you are just one participant of, self-employed folks can still set up and fund a Solo 401(k) plan for the year. The 2018 limits for salary deferrals are $18,500 (or $24,500 if you are age 50+). You also may have additional amounts that you can contribute through you tax filing deadline, but the plan must exist and any salary deferrals must occur before 12/31.

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 $6,900 (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.

Harvest Losses – There aren’t many good things that come from the stock market falling, but one silver lining is that now may be a good time to sell for a loss in a taxable account. 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.

Required Minimum Distributions – Did you turn 70.5 in 2018? If so, then you may need to take a required minimum (RMD) distribution from your IRA or retirement account. If 2018 is your first RMD year, you are allowed a 3-month grace period until April 1, 2019 to make the distribution. However, you will still need to take the 2019 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 ’18 RMD in ’18.

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 grand kids, 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 super funding up to five years’ worth of annual gifts. Anyone can gift up to $15,000 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 $75,000 (or $150,000 for two people) in 2018.

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 school student 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). 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.