Year-End Tax Planning Guide for Individuals

The end of the year is upon us!  It always goes more quickly than we ever imagine.  Though this year feels a bit like it cannot be fast enough!

As the calendar year ends the tax season begins, so now is a good time to start thinking about getting ready for taxes. A little planning now can save you thousands later. 

This is intended as a guide to help your thinking, this is not advice.  If you would like some help preparing for tax season, please reach out – we can help you sort out the details and plan for the year ahead.  

There are a couple of changes unique to 2020 that you should keep in mind:

  1. Normally if you are over 70 and a half you would have to withdraw a minimum amount from your retirement accounts. But this year there is no required minimum distribution. So you can leave your money in your IRA and defer taxes.
  2. The IRS changed the charitable contribution limit this year to 100% of your income as long as your contributions go to qualified organizations (read more about what a qualified organization is here).

In the meantime here are a few things you may want to think about.  


If you earn a salary there are a few things you can do to minimize your tax bill.  

Does your employer provide flexible spending accounts?  If so sign up before December 31st.  You must do this by the end of the year, so this is the time to look into it if you haven’t already.  A flexible spending account can help you reduce taxes on money spent on healthcare and is a great tool. 

Take advantage of tax-deferred retirement accounts (such as 401(K) plans). Check into your plan to see if you have any end of year requirements and consider maximizing where you can. 

Itemized Deductions

Remember that anything you plan to deduct on your 2020 taxes must be spent by the end of 2020.  

Consider year-end charitable gifts, there are still tax advantages to charitable gift-giving, it has just become somewhat more complex.  There are some extra tax benefits to giving assets (such as appreciated stock or property). Get receipts for non-cash donations and if you are 70 ½ or older consider making donations directly from your IRA.   

Depending on your state tax situation Schedule A itemization may still apply.  The new tax law increased the federal standard deduction to $12,000 for single tax-payers and $24,000 for married tax-payers filing jointly.  But state situations differ. Depending on the state you are in, you may still be able to Itemize on Schedule A.  

Also, consider the pattern of your spending to see if you can bunch spending into a year.  If you can bunch Schedule A deductions into one year, by perhaps bringing forward January/February spending or delaying November/December payments you may be able to overcome some of the limits and get a bigger tax break.  This is especially true if your itemized deductions are close to the standard deduction or any deduction limits.  


This year, due to COVID you are NOT required to take minimum distributions. SO, to minimize your tax burden you should leave as much money as possible in your IRA. Only withdraw the money that you need.  

If you are 70 and a half or older, you may want to make any charitable donations directly from your IRA.  The donation amount will count toward your required minimum distribution and up to $100,000 will be excluded from taxable income.  This can have a benefit if you do not meet the threshold to itemize.  

Consider converting any traditional IRA’s into Roth IRA’s.  Withdrawals from Traditional IRA accounts are subject to income taxes when they are withdrawn, whereas proceeds from Roth IRA accounts are not subject to income tax.  The conversion is taxable but if you had a low-income year, you may get some real benefits here.  

Consider contributing the maximum amount into a company-sponsored tax-deferred retirement account.  Check to see if your employer will allow you to catch-up for the current year. 

Note that you have until April 15th, 2021 to contribute to your traditional IRA’s for 2020 and that the maximum amount is $6,000 with an additional $1,000 “catch-up” amount for taxpayers 50 or older.  If you participate in an employer retirement plan your income may not allow an IRA deduction, so just check your situation.  


Decide whether you want to sell stocks to realize any losses in 2020. This depends heavily on your investment strategy and your income but if you are going to sell anyway you may want to realize the loss in 2020. 

OR you may prefer to realize the loss in 2021. Consider your strategy and expected income levels.  

Sell Stocks to realize gains to off-set capital losses – again this depends on your investment strategy but you have excess losses this year you may want to realize some gains so that you get the full tax benefit in 2019.   

Planning for year end

The contents of this guide/checklist are for your information only and cannot constitute advice. Your situation may imply or require different strategies.  But definitely take a little time as the year ends to give some thought to your 2020 taxes – a little planning can go a long way.


  1. Ellen Bucciarelli on November 28, 2019 at 9:11 pm

    Does the itemization of schedule A apply to us in New Jersey?

  2. Jody Chesnov on March 25, 2020 at 4:40 pm

    Yes it applies to all states when you qualify and your expenses are more than the standard deduction