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Two Year End Tips/Reminders Thumbnail

Two Year End Tips/Reminders

This week’s article is going to be super short. I wanted to share a couple of important notes/reminders before the end of the year. I feel silly sharing this as your advisor has probably already mentioned them, but just in case. I’m not sure if this is even a two-minute read. 

 Flexible Spending Accounts (FSA)

  • Reminder these are a use-it-or-lose-it program. 
  • If you have unspent dollars in your FSA, do your best to spend them on eligible expenses this calendar year. 
  • If you have a balance left and aren’t sure you will spend it all, reach out to your benefits people to find out if you can roll over any unused amounts. 
  • Most employers allow a certain amount of unused FSA dollars to be rolled over to the next calendar year, but it is not a requirement. 
  • And be sure to verify the dollar amount and if there is a time limit as to when you can use those rollover dollars next year. 

Gifting Rules Clarification

  • If you are doing any gifting to a family member this year, know the IRS has recently provided an answer to a question that only keeps people like me awake at night. 
  • If you write a check to gift some money to a family member at the end of the year, but they don’t cash the check until next year, which year is the gift considered complete?
  • Well, the gift is complete in the year in which the check is cashed. 
  • So, if you write a check to a kid for $17,000 this year at Christmas (gift max for 2023) and then write them another one on January 2, 2024 for $18,000 (max for 2024), and that “dang lazy kid” doesn’t cash the 2023 check until January 3, 2024 when they also cash the 2024 check, well, you have exceeded the gift limit for 2024. 
  • My tip if you are writing that check – be sure they cash the check this calendar year. Gifts must be completed by the end of the calendar year to use annual gift tax exclusion.
  • Better yet, do an electronic transfer and be sure it enters their account before the end of the year. 

 Told you this was a short one. I am giving you a reprieve before I rant about why I hate mutual funds in taxable accounts next week. You’ve been warned😉