2018 Year-End Planning Checklist

By November 15, 2018 October 29th, 2019 No Comments

The end of the year generally serves as a trigger for people to look back at the goals that were met and start developing goals for the new year. It’s also a great time to execute important financial contributions to take advantage of end-of-year tax incentives and get a head start on next year’s financial goals. However, the recent Tax Cuts and Jobs Act created some changes that people should be mindful of as they consider year-end planning. The checklist below highlights a few of the changes and items one may want to consider.

Annual Gift Exclusion

  • Annual gift exclusion is up to $15,000 ($30,000 for a married couple)

Charitable Gifting

  • Given increased standard deductions, consider bunching charitable gifts into one tax year
  • Gifting of appreciated assets

Education Contributions (529)

  • Submit all qualified expenses for 2018
  • Submit annual funding, the gift exclusion mentioned above can be used to make contributions to 529
  • Accelerate gifts (up to five years)
  • Withdraw for k-12 expenses

Retirement Plans

  • Maximize contributions
  • Convert IRA to Roth, if possible
  • If 70.5 years old or older, withdraw required minimum distribution (RMD) from retirement accounts

Healthcare and Medicare

  • Use HSA or FSA funds

Some Other Tax Considerations

  • Alimony
  • New business owner deduction
  • Medicare surtax


Annual Gift Exclusion

The annual gift tax exclusion is up to $15,000 ($30,000 for a married couple).  There is no limit on how much you can gift in total per year. There is a limit on how much you can gift to any one individual per year without triggering a gift tax. Gifts must be completed by year-end to qualify for this year’s exclusion.

Charitable Gifting

Bunching charitable contributions for two or three years using a Donor Advised Fund

If you are on the cusp of being over the standard deduction, you should consider accelerating your gifts for future years. For more details on charitable gifting strategies with the new tax law you can reference this link to a blog post on our website:

Important Custodian/ Asset Transfer Information

Stock/ cash gifts directly to charity Must have signed transfer memo to SignatureFD by December 15, 2018
Mutual Fund transfers Must have signed transfer memo to SignatureFD by November 30, 2018
Stock/ cash gifts made to a DAF, then gifted to charitable organizations Must have signed transfer memo to SignatureFD by November 30, 2018


Education Contributions (529)

A special provision allows you to accelerate your annual gifts and use up to five years of your annual gift exclusion in one year ($75,000 per person or $150,000 per couple).  Must file gift tax return with this strategy.

Beginning in 2018 some states are allowing up to $10,000 per year can be distributed from a 529 Plan. In the past, distributions could only be used for “qualified higher education expenses.” Be sure to verify with your state plan provider.

Retirement Plans

If you were 70.5 years old or older in 2018, you must take an RMD from your retirement accounts (excluding Roth IRAs) before December 31, 2018. If this is your first RMD (meaning you turned 70.5 in 2018), you are not required to take it until April 1, 2019, but you would then be required to take two years’ worth of distributions in 2019. Please consult your advisor regarding implications on the timing of your RMDs.  Up to $100,000 of one’s RMD can be gifted directly to a qualified charity.

In 2018, no recharacterizations of Roth conversions are allowed. Consult your tax advisor before converting IRA funds to Roth.

401(k), Roth 401(k), 403(b), and 457 Plans Max contributions of $18,500 (as well as additional $6,000 catch-up for those 50+) must be made by December 31, 2018
IRAs Maximum contribution of $5,500 (as well as additional $1,000 catch-up for those 50+) must be made by April 15, 2019
Roth IRA Maximum after-tax contributions of $5,500 (as well as additional catch-up for those 50+) must be made by April 15, 2019
SEP IRA/ Solo 401(k) Maximum contributions (lesser of $55,000 or 25% compensation) can be made until the tax filing date (including the extended filing date)


Healthcare and Medicare

  • HSA contributions increased from $6,750 to $6,900 for family plans ($3,450 for single).
  • FSA contributions increased from $2,600 to $2,650.

*Keep in mind that unlike HSA funds, funds in your FSA typically do not roll over from year to year (based on an employer plan, you may be able to elect to roll over $500 or you can elect a “grace period” to use funds). The deadline to use these funds is December 31, 2018, or March 15, 2019, if you elect to use the grace period.  

Some Other Tax Considerations

  • Alimony is no longer deductible for payor agreements signed after 12/31/2018.
  • There is a new business owner deduction for passthrough income with the exception of special service businesses (i.e. accountants, consultants, doctors, etc.)
  • Medicare 3.8% surtax still applies to investment income (a.k.a. Net Investment Income Tax), and an additional 0.9% Medicare surtax tax remains until 2023, which applies to wages and self-employment income above $250k per couple ($200k for single). Distributions from retirement accounts and SS benefits are excluded. 

Changes to Itemized Deductions for 2018







Standard Deduction Individuals – $6,350

Married Filing Jointly – $12,700

Individuals – $12,000

Married Filing Jointly – $24,000

Many more taxpayers will be taking the standard deduction.
State and Local Taxes State, local, & property taxes were deductible on Schedule A Capped at $10,000 Only $10,000 of your state and local taxes can be deducted if you itemize.
Mortgage Interest Interest on up to $1,000,000 of indebtedness was deductible $750,000 indebtedness limit on new mortgages as of 2018. Home equity line of credit limitations. Provision that allowed deduction of interest for HELOCs is eliminated, but if loan is used to improve the home the deduction may still be allowed
Medical Expenses 7.5% AGI floor 7.5% AGI floor (will go to 10% next year) Take medical expenses this year with less potential deductions for 2019


Other “Miscellaneous Deductions,” including unreimbursed business expenses, investment fees, tax prep fees, etc. were deductible beyond a 2% of AGI floor Deductions categorized as “Miscellaneous Deductions” repealed Tax prep fees, Investment fees, unreimbursed business expenses, certain membership dues will no longer be deductible
Charitable Contributions Deductions for charitable contributions limited to 50% of AGI for cash gifts and 30% of AGI for appreciated assets Deduction for cash gifted to public charities increased to 60% of AGI; however, gifting of appreciated assets limits the cash AGI deduction at 50% with the non-cash component limit of 30% of AGI See Charitable Gifting Strategies above*

Source: The Tax Cuts and Jobs Act (TCJA) Pub.L. 115–97