1. Consider Donor-Advised Funds (DAFs)

If you’re planning to donate to a charity, a Donor-Advised Fund (DAF) can be a tax-efficient way to give. You can contribute to a DAF now, receive an immediate tax deduction, and decide later which charities to support. This is an excellent option if you’ve had a higher-than-usual income this year and want to offset it. Consider supporting local Deer Park non-profits, such as the Greenhouse Food Bank or Habitat for Humanity-Spokane, through your DAF.

2. Required Minimum Distributions (RMDs)

If you are 73 or older, don’t forget about your Required Minimum Distributions (RMDs) from traditional IRAs and 401(k)s. Failing to take the correct RMD can result in a 50% penalty on the amount you should have withdrawn. Speak with a financial advisor to ensure you’re on track.

3. Qualified Charitable Distributions (QCDs)

Did you know that if you’re 70½ or older, you can donate up to $100,000 directly from your IRA to a charity without it being considered taxable income? This is known as a Qualified Charitable Distribution (QCD). It’s a great way to support causes you care about while reducing your taxable income. Local organizations like Deer Park High School’s sports programs or Second Harvest Inland Northwest could greatly benefit from your generosity.

4. Roth IRA Conversions

A Roth conversion can be a savvy move if you expect to be in a higher tax bracket in retirement or want to leave a tax-free inheritance to your heirs. Converting a portion of your traditional IRA to a Roth IRA now allows you to pay taxes at today’s rate rather than later when rates might be higher. Careful planning can ensure you don’t push yourself into a higher tax bracket this year.

5. Capital Gain Harvesting

Depending on your income, you might qualify for the 0% tax rate on long-term capital gains. If your taxable income falls below certain thresholds ($89,250 for married couples filing jointly or $44,625 for singles in 2024), you could potentially sell appreciated investments at no tax cost. This can be a great way to rebalance your portfolio or generate extra income.

6. Senior Discounts on Property Taxes

If you’re a senior living in Spokane or Stevens County, you might be eligible for a property tax reduction if your income is below a certain level. This program can help lower your annual expenses, making it easier to stay in your home as you age. Each county has specific income thresholds and application processes, so be sure to check the details.

For more information:

• Spokane County residents can call the Assessor’s Office at (509) 477-3698. If you are 62 or older, own your home, and have a total household income of less than $50,000, you may be eligible for a reduction in your property taxes. An application is available on the Assessor Exemption Application Forms website, or you can call 477-3698 to have one mailed to you.
• Stevens County residents can reach out to the Assessor’s Office at (509) 684-6161 or visit https://www.stevenscountywa.gov/assessor for information on income limits and qualifications.

Be sure to act soon to take advantage of this valuable benefit!

7. Retirement Plan Contributions for Business Owners

If you’re a business owner in Deer Park or the surrounding area, setting up or contributing to a business retirement plan before the end of the year can help you and your employees save on taxes while preparing for your future. Options like SEP IRAs, SIMPLE IRAs, and 401(k) plans allow you to make contributions that are tax-deductible for your business.

How much could you save? Let’s say you contribute $10,000 to a SEP IRA or 401(k) plan. If you’re in the 22% tax bracket, that could save you $2,200 in taxes. Higher contributions mean even greater savings, with potential limits up to $66,000 for a SEP IRA and $23,000 (or more, with catch-up contributions) for a 401(k).

Not only are you reducing your taxable income, but you’re also building a solid retirement fund. Plus, offering a retirement plan can be a great incentive to attract and retain employees. If you haven’t set up a plan yet, consider doing so before the end of the year, or make the most of existing plans by maximizing contributions.

Consult a financial advisor to understand which plan is right for your business and how you can maximize your tax savings while planning for retirement.

Start Planning Now

With the end of the year fast approaching, now is the time to evaluate your tax situation. Effective planning could mean more money in your pocket, a stronger financial future, and a greater impact on the Deer Park community. Consult a financial advisor who understands your needs and can help you make the most of these opportunities.

For tailored advice, consider reaching out to a local Deer Park, WA financial advisor. Read reviews to see which one sounds like the right fit for you. They can provide personalized strategies to help you save on taxes and work towards your financial goals.

When you have questions or just want to chat about your progress Schedule A Complimentary Discovery Call or reach out to Caleb Stapp at 509.241.8306.

LPL Financial representatives offer access to Trust Services through The Private Trust Company N.A. an affiliate of LPL Financial. Securities and advisory services are offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. Deep Creek Financial Planning is not registered as a broker-dealer or investment advisor. This information is not intended to be a substitute for individualized tax advice. Please consult your tax advisor regarding your specific situation. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. IRA conversions prompts disclosure: Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

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Fiduciary duties are central to managing retirement plans. Business owners often act as fiduciaries, meaning they are legally required to put their employees’ interests ahead of their own. This responsibility includes ensuring that retirement plans are managed prudently and in compliance with all applicable regulations. Failure to adhere to these standards can lead to serious consequences, including financial penalties and legal liabilities.

The credential also emphasizes a fiduciary advisor’s role in optimizing plan design and performance. Stapp will now be able to help business owners implement strategies that not only meet legal requirements but also enhance plan outcomes. This includes evaluating plan options, choosing the best service providers, and implementing best practices to ensure that retirement plans serve the best interests of both the business and its employees.

For local business owners, this means having access to a level of expertise that can mitigate risks and enhance the effectiveness of their retirement plans. As the only CPFA-certified advisor in the area, Stapp offers a distinct advantage, combining in-depth knowledge with a dedicated focus on fiduciary excellence.

For more information on how Deep Creek Financial Planning can help your business with its retirement planning needs and to schedule a complimentary call visit www.DeepCreekFinancialPlanning.com or reach out to Caleb Stapp at 509.241.8306.

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Now, by the time I invite someone to become a client we’ve spent hours together.

I understand what’s most important to them, we’ve worked together to create a tailored plan for their finances, and we’re developing a fantastic business friendship.

So when this great couple said, “Yes, Caleb, we’d like to move forward with you” why did I say “No”?

Because some of my advice is so crucial to my client’s success that if they’re not 100% on-board then I know I can’t in good conscience accept responsibility for their plan.

Here’s what I recommended (and why):

Consolidate your accounts to as few firms as possible.

Step one in working with me is getting organized. We’ll use the fewest number of accounts, firms, and investments possible to accomplish your goals. Its not unusual for investors to have money all over the place, but its rarely helpful.

You may have money in an old 401K at one firm, checking and savings accounts with a local bank (or two!) in Deer Park, your current 401K, two or three IRAs at different firms that you set up when going through different phases, an inherited account or annuity from your parents, and then three different apps that you’ve tried out…

That way lies madness.

Its not unusual for investors to have money all over the place, but its rarely helpful.

Last year my recommendations helped one couple in Chewelah go from ELEVEN different financial firms (with logins, statements, etc.) down to only FIVE. What a relief to be able to STOP PAYING ATTENTION and NOT feel guilty because your money is there!

You will save yourself so much time and energy by being organized so you’re ready for these key life moments:

• When you go to buy a house or start a business – can you find all your money?
• At tax time – are you sure you got all the 1099s?
• When someone dies – do the survivors even know where to look for everything?

And are there any ongoing benefits to consolidation? Sooo many….

• Easier Distributions: If you’re retired and taking money out of your accounts consolidation is a MUST. Otherwise your taxes, portfolio, and overall plan could suffer.
• Time Savings: Checking fewer accounts saves time, making it quicker to monitor and know what’s going on.
• Enhanced Financial Planning: I give my best advice when I see your entire portfolio – and I refuse to give you less than my best.
• Reduced Stress: Managing fewer accounts can reduce the stress and confusion that come with handling multiple investments.
• Enhanced Tax Planning: Every dollar has tax implications. If your advisor isn’t seeing everything then you’ve got a ticking tax time bomb on your hands.
• Possibly Lower Fees: Consolidating accounts could reduce the number of fees you pay, helping you save money.

Take a step towards organizing your financial future by consolidating your accounts. If you’d like to hear how I could be of help simply Schedule a Discovery Call to discuss your personalized financial goals

Two years ago I helped one investor consolidate FIVE old 401(k)s into ONE – and along the way we discovered money that hadn’t even been invested… meaning that by not having consolidated years before he had missed out on THOUSANDS of dollars of growth.
Don’t let that be your story.

Want to know your options? Check my Workshop Schedule and register for “What To Do With Your Old 401(k)?” the next time its available!

The post I Told Them “No”?! appeared first on Deep Creek Financial Planning.