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ANNUAL REMINDERS the maximum amount to your plans, you might want to
AT THE END OF THE YEAR, consider adding to your retirement plans and IRAs. You
will need to talk with your financial planner because
IT IS A GOOD TIME TO REVIEW some of the contributions might be able to be made in
FINANCIAL ITEMS. 2023. While on the topic of contributing to your IRA
accounts, if you have a child, that you pay in your
business, and they have earned income, then you might
want to consider opening up a Roth IRA for that child.
Even a $500 contribution earning stock market returns,
2022 has been an in an index fund, over the next forty to fifty years could
amount to some money. While looking at your retire-
interesting year in the ment plans, it is a good idea to review your beneficiaries
and make sure they are up-to-date. Many times people
economy and the market. forget to review the beneficiaries, and we find ex-spouses
and people that have passed away listed as beneficiaries.
The 2022 year has been a turbulent year in the Those need to be updated as needed. Talking about ben-
economy and market to say the least. That being said, we eficiaries. If you have inherited an IRA from someone
have to remember that market volatility is the norm and and/or you are subject to Required Minimum Distribu-
not the anomaly. If we review history, the stock market tions (RMD), you need to review them and make sure
in the USA has been around since the late 1700s. If we you have taken the RMD this year. If you forgot to take
think back to all that has happened since the 1700s, we the RMD in the last few years you will need to reach
have a long list of what we would consider crazy events out to your CPA and check on the IRS allowing penalty
if they happened today. The stock market has survived relief provided during COVID (2022).
through the Civil War, great world wars, smaller wars,
and even a pandemic that makes COVID small in com-
parison. Not making light of COVID because we have all LEGACY PLANNING
been impacted and have lost family and friends; however, When it comes to legacy planning, many small
during the Spanish Flu an estimated 25%-30% of the business are just trying to make it past next year while
world population died (Liang, Liang et al. 2021). So while others are looking for ways to help society and/or pass
we have had an interesting year in the market, volatility the business to the next generation. Either way this could
is nothing new, and it is part of normal market cycles. apply to you and your business.
The market will recover at some point. With that being
said, some items need to be reviewed by the end of the ¨ One of the easiest ways to contribute is to give cash
year and stressing over the market, or looking at your gifts. That can be helpful if giving to family with no
account more often is not one of the year end items. With strings attached. If giving to a charity you can always
the current market ups and downs, tax loss harvesting gift items that have a low cost basis, and the charity is
to capture some of the losses is a good idea this year. able to sell them without a tax consequence.
You will need to have a tax person help you, but you can
use the losses to offset gains now or in the future. While ¨ You can also consider a qualified charitable distribu-
looking at your gains and losses you also need to look for tion (QCD) from a IRA.
any concentrated positions. If you have a large gain, you
might be able to use some of your losses in other posi- ¨ Another strategy if you are receiving a large lump
tions to reduce your concentrated positions without much sum of assets (from selling a business or an asset) is to
of a tax burden. While looking at both of those items, it is consider using a Donor Advised Fund (DAF) because
a good time to rebalance the portfolio, too. you can contribute a large lump sum in one year but
Another item to review is your con-tributions to your possibly not distribute it to charities in the same year
retirement plan and IRAs. If you have not contributed you take the charitable contribution for taxes.

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