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End of Year Financial Planning Checklist for 2021

End of Year Financial Planning Checklist for 2021

November 16, 2021

As 2022 gets closer, it’s time to go over your 2021 finances and start planning for the next year. After the difficult year of 2020, you may have faced financial problems in 2021. Whether you had a major job change, income change, or a normal year, here is an end of year financial planning checklist for 2021:

  • Check Your Retirement Plans

Plan to make any IRA or Roth IRA contributions before April 15th, 2022. The contribution limit for the 2021 tax year is $6,000 per person with a $1,000 catch up if you are age 50 or older. Check your income level to make sure you are eligible to make direct contributions to your Roth IRA. If not, there are back-door options that are available.

Take a look at your year-to-date contributions for any employer sponsored 401(k)s and other retirement plans. For the 2021 tax year, each employee is allowed to contribute $19,500 to their employer-sponsored account with a $6,500 catch-up contribution if you are 50 years old or older. If you are not on track to maximize your tax deduction for the employer-sponsored 401(k), check your finances to see if there is any way you can contribute more money to lower your tax liability in April.

  • Look at your Health Care Accounts and Benefits

If you have an employer-sponsored Flexible Savings Account (FSA), check your balance. Any money in your FSA that you do not use, you lose. Try to make the most of your FSA money.  

Review how much you have contributed to a Health Savings Account if you have a high deductible health plan. You want to maximize all the savings you can. The money you contribute to an HSA does not have to be spent within the year, unlike an FSA.

Stay alert for your employer’s open enrollment for 2022 healthcare and additional benefits. Check for any changes in existing policies and compare other available options to ensure you have the best coverage for yourself and your family.

  • Understand Your Capital Gains Taxes

 If you have sold any investments that you held for over one year, you need to consider your year-to-date realized capital gains. You need to be prepared for the long-term capital gains rate that can be imposed on you.

The long-term capital gains rate brackets are (based on taxable income):

Married Filing Jointly:

0% - up to $80,800

15% - up to $80,800 to $501,600

20% - $501,601 and up


0% - up to $40,400

15% - $40,401 to $445,850

20% - $445,851 and up

By taking steps to lower your taxable income, you could bump yourself down to a lower long term capital gains rate bracket.

If you’re not sure where to start when wrapping up your 2021 finances, contact us at Bernard Wolfe and Associates. We can help you prepare for 2022 and get you ready for your 2021 tax filings. Contact us today to get started!