Taxes and…
Just a quick note this morning with some operational updates.
Gain/Loss Matching
When you get your fourth quarter confirmation statements, you may see some buy/sell activity. If you do, know that during late December, we looked at every portfolio from a tax planning perspective. If you had realized gain for the year, we looked to see what we could sell which might have losses, as a way to absorb some of that taxable gain. If you had realized losses for the year, we looked to see what we could sell which had a gain, in a position in which you might be overweight, such that we could take that gain without adding to your tax load.
Tax Statements
Financial institutions have until February 16th to get tax forms to you. If they file for a Client Tax Form extension, which we expect most to do, they have until March 16th, 2025. Given the number of statements involved, we fully expect Schwab to file for this extension. For those of you who are clients, we track this on an almost daily basis starting mid-February. We will download these forms and get them to you, or your CPA, as soon as they are available.
Charitable Gifts
Some of you made charitable gifts with appreciated stock. For those of you who have done this, we will get a summary of these gifts to you by the end of February. You will want this as part of your documentation for your CPA. Others of you made Qualified Charitable Distributions or QCDs from your IRAs. For those of you who are clients, we will get a summary of these QCDs to you by the end of February. Again, you will want this information for your CPA. The custodians don’t distinguish between types of distributions when dollars leave your IRA.
IRA Contributions
If you qualify to make either deductible or Roth IRA contributions for 2025 and have not yet done so, you have until the earlier of when you file your tax return or April 15th, 2026, to make that contribution. The ability to make Roth contributions begins to phase out for single taxpayers with AGI of $153,000 or more and at $242,000 for married filing jointly.
Retirement Plan Sponsors
Some of you own businesses which sponsor retirement plans. If this is you, we recommend you ask your CPA to file an extension for your business return. This is especially the case if you have made or anticipate making a profit-sharing plan contribution. For those of you who are clients, our guidance on time frames is as follows. We will work with you in January to get accurate census information to the TPA. TPA completes compliance testing and profit-sharing scenarios by mid to end March. We review these results with you, so you can make a decision regarding any profit-sharing contributions you may wish to make. We recommend making those contributions by mid-May. After this, provided there is no other outstanding information due for your return, you can file your business tax return.
That’s it for now. Let us know if and as you have questions. As always, it is a pleasure to serve you.