Thought Leadership

It’s time to start your year end planning

It may be hard to believe, but Labor Day and the end of the summer is just days away.  This makes it an ideal time to start your year-end planning.  While year-end planning may mean something different to each of us, here are some items to consider.

Tax planning

Remaining estimated tax payments for 2014 are due September 15 and January 15.  Estimates should not be ignored.  Inadequate and late estimate payments draw potential penalties.  Year-end tax planning, especially the timing of income and deductible expenses is still worthwhile.  If you are participating in a 401k or other employer sponsored retirement savings plan, maximize your contributions for the year and if you cannot do so at least contribute enough to maximize your employer’s contribution match.  If your employer does not sponsor a plan then you likely qualify for contribution to an IRA.  There are several types of IRAs with different attributes.  Traditional and SEP IRAs are deductible for tax purposes.  Nondeductible contributions can also be made.  You may also qualify for contribution to a Roth IRA.  While not tax deductible, the principal grows tax free and withdrawals are likewise free of tax.

Estate, Wealth Transfer and Asset Protection Planning:

Year-end is a good time to update your estate and financial plans.  Given the significant changes in state and federal law in the last two years, updating your will and trust, or actually developing an estate plan, if one hasn’t been developed, is important before year-end.  If your plan documents are more than eighteen months old, your plan is likely out of date and in the event of a death, the family is likely to get a few unwelcome surprises.  Preserving and protecting your assets may be as important as your estate plan.  I recommend examining your property, casualty, and liability insurance making certain that your coverage has kept pace with the values of your important assets.  If you have bought any new assets, like a car, in the last nine months, confirm that your agent is actually insuring the vehicle.  We have had clients that have had an accident only to find that their new vehicle wasn’t covered.  If you don’t have a liability umbrella policy add it to your coverage.  If you have the coverage and it hasn’t been increased in the last three years, increase it.  We have had clients with inadequate liability coverage with accidents and suits for amounts in excess of their coverage.  Examine your life insurance and if you haven’t met with your agent in the two years, do so to discuss the coverage, the owner and beneficiary designations.  It may be well to consider changes and ways to keep the life insurance out of your estate for tax purposes.


Earl H. Cohen
Phone: 952-460-9242