Year-end investment planning tips to help you save

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Here are actions you can take by year end to potentially reduce your tax bill and keep your portfolio on track.

Taking some of the following actions before the year ends may help reduce the amount you send the IRS and improve your overall financial picture.

Actions to take now:

  • Determine if any adjustments are needed to tax withholding or estimated payments.
  • Ask your advisors for a realized and unrealized gain/loss report to assess the investment income and capital gains/losses you should expect this year.
  • Review your portfolio with your advisors to help ensure your asset allocation still aligns with your goals.
  • Review tax-loss selling strategies if you have capital gains, but wish to keep exposure to a depreciated sector or security. Remember, the last day to “double up” a position to help avoid a wash sale is November 30, 2021
  • For tax planning purposes, determine whether the 0%, 15% or 20% capital gains rate will apply to you and whether adjusting the timing of capital gains recognition makes sense for your situation.
  • Consider funding a Flexible Spending Account (FSA) or Health Savings Account (HSA), if applicable, during your employer’s annual benefits enrollment period.

Actions to consider before December 31:

  • Make maximum contributions to your employer retirement accounts; if contributing to your IRA, the deadline is April 15, 2022.
  • Complete any Roth IRA conversions.
  • Make gifts to individuals or charities. The annual gift tax exclusion amount for 2021 gifts to individuals is $15,000
  • When selling securities you own, remember the trade date — not the settlement date — determines the year of the sale and recognition of any gain or loss in most situations. Trades executed on or before December 31, 2021 will be taxable events in 2021.
Wells Fargo Advisors is not engaged in rendering legal or tax advice. If legal or tax assistance is required, the services of a competent professional should be sought