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Tax tips to consider before 2020 ends

Published: Dec. 15, 2020 at 7:39 AM EST
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LEXINGTON, Ky. (WKYT) - Year-end tax strategy is often a consideration that isn’t taken into account until it’s too late. As 2020 comes to a close, there are several opportunities to help mitigate a taxpayer’s burden with the proper amount of financial and tax planning. Fiduciary financial planning advisor Rob De Lessio of Strategic Wealth Designers joined the newscast to highlight some opportunities for viewers to take advantage of. He says every year billions of dollars end up being taxed that could have potentially been repositioned to lighten the burden owed.

“It’s all about putting yourself in the best position by the time the new year starts.” De Lessio says. “An easy one to help mitigate the tax bill is by maxing out your 401K and HSA contributions. Millions of Americans have the opportunity to possess one or both of these accounts but far too often do not create or contribute. Having an HSA account you can use that isn’t taxed is a big saving but you have to have it set up before the end of the year to contribute.”

For the savvy investor who doesn’t always make the right bet, selling some losers can be a great opportunity to offset gains that developed over the year. Losses actually offset the gains on an even dollar for dollar basis. De Lessio says no one likes to see red in a portfolio but if you made a bad investment this helps you recoup some of the loss.

“Hopefully not often but sometimes we all pick a loser, we thought the stock was going up and it goes down,” De Lessio says. “This year certain sectors really took a hit while others soared so you likely have gains to offset those losses and it might, keyword being might, be a good time to let that stock that has fallen on hard times, move on from your portfolio. The tax offset will make the loss sting less.”

Finally, for business owners, December can be an opportunity to upgrade equipment or purchases that aid in the business. Doing this also can reduce a significant chunk of a tax burden depending on the nature of the business and level of expenditure. Seek out a professional financial and tax planning advisor to learn additional ways you can adjust a tax strategy before 2020 is history. To see additional stories surrounding business and economic news for the Lexington area, visit https://WKYT.com/MoneyMatters and if you have a question for Rob send an email to info@swdgroup.com.

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