15 Point Year-End Financial Checklist

Individuals
 

1. Retirement Contributions.  The 2017 maximum 401(k) / 403(b) contributions are $18,000 and $24,000 if you’re over 50.  Pre-taxed contributions will lower your 2017 taxable income.  In contrast, Roth contributions won’t lower your taxable income, but will grow tax free!
2. Flexible Spending Account.  Keep in mind that these are “use it or lose it” benefits.  If you put funds aside tax-free, be sure to submit your paperwork by year-end.
3. Health Savings Account.  Self-only HSA accounts can be funded up to $3,400 and $4,400 if you’re over 50.  Family plans can put aside $6,750 / $7,750 for 2017.
4. Estate Planning.  If your estate is projected to be at risk of paying estate taxes, consider gifting by year-end.  For instance, the State of Washington's taxable estate starts at $2.129 million.  Be sure to discuss this with your attorney and/or CPA.
5. Charitable Donations – Tax free transfers for IRA owners over 70.  While IRA distributions are generally taxable, you can authorize a qualified charitable distribution (QCD) up to $100,000 be paid from your IRA tax free!
6. Charitable Donations – Stock.  The stock market has soared this year.  If your stock has appreciated, and you've owned it for longer than 12 months, you will get a bigger itemized deduction by donating the stock than by selling it and giving the cash.  Another benefit:  you will avoid paying capital gains tax on the sale.
7. Pay Estimated Tax.  The US tax system is a "pay-as-you-go" system. This means that you are required to pay income tax as you receive the money.  If you had a taxable windfall this year, to minimize interest and penalties, pay the tax in now.  If you’re not sure how much to pay, engage your accountant to perform a tax analysis.
8. Rebalance.  The stock market has gone gangbusters.  This is a good time to rebalance your investments.  Consider increasing future foreign investments and reducing US investments or vice versa.  Stock vs. bonds or CD is another consideration.  Whatever your risk tolerance, now is a good time to adjust for 2018.

 
Corporations
 

1. Reimbursements.  If you still have unreimbursed business expenses, submit an expense report so your company can get the tax deduction in 2017 (and you will get credited in 2017) for the expenses!
2. Healthcare Coverage.  If your company pays shareholder and/or employee healthcare premiums, be sure it’s recorded properly on your W-2.  If in doubt, address this matter with your payroll company before December 22.
3. Independent Contractors.  Your company is responsible for sending 1099s to certain vendors for whom your business paid $600+.  (This applies to owners of rental real estate.)  Form 1099 must be sent in January.  Now is a great time to check your file folder of vendor W-9s to ensure you have required information.
4. Equipment Purchases.  If your company needs a new server, truck, freezer, etc., consider buying the equipment before year-end.  These purchases could reduce your company’s taxable income!
5. Take Inventory.  If you sell products, conduct an inventory assessment and compare the results to your last inventory report.  Make any necessary adjustments to ensure you have an accurate account of how much capital you have wrapped-up in your current inventory.
6. Review Financial Statements.  Review your Profit & Loss Statement for accuracy.  Make sure Gross Revenue equals the same number(s) you reported to your state(s).  Review your 2016-2017 Balance Sheet accounts and question all negative numbers.  Question any numbers that did not change from 2016.  Invoice all customers for work performed and products shipped.  Review your AR and AP Aging and make efforts to collect what’s due and pay what’s owed.
7. Build / Finalize 2018 Budget.  Now that you’ve reviewed your 2017 financial statements, finalize your 2018 budget.

 
If you need assistance with your year-end activities, contact us!  Our TaxTeam provides federal, state and international tax advice -- from start-ups to multinational corporations at all stages of their life cycle. We carefully guide clients through complex tax rules and regulations and provide thoughtful and comprehensive solutions that help clients achieve their objectives.