A clock with tax time sticky note and calculator on the desk

It’s Time to Get Proactive About your Taxes

by Steve Schott, Financial Advisor, Schott Financial Management

Tax Season is one of the busiest times in the financial world and usually begins seconds after midnight on January 1st. While taxes are not as exciting as watching the Whiskey Row Boot Drop on New Year’s Eve, they are a fiscal necessity. Here are a few things to keep in mind as you prepare for April 15th. 

IRA Contributions: it’s time to start making your IRA contributions. The sooner, the better. For most IRAs, contributions are $6,000/annually with a catch-up provision of an additional $1,000. That provision only applies if you are over the age of 50. If you or your spouse have an employer-sponsored retirement plan, there may be limitations to what you can add.

RMDs: otherwise known as Required Minimum Distributions. An RMD, according to Investopedia, is the amount of money that must be withdrawn from an employer-sponsored retirement plan, traditional IRA, SEP, or SIMPLE individual retirement account (IRA) by owners and qualified retirement plan participants of retirement age. In 2018, President Trump changed the age of RMDs from 70 ½ to 72 to reflect the fact that Americans are living longer lives. I encourage my clients to be diligent about taking their RMDs because the penalties for not taking them are costly.  

1099s: Traditionally, 1099s begin to show up in mailboxes around February, depending on the types of investments you have. Deadlines can become delayed as security companies scramble to finalize Traditionally, 1099s begin to show up in mailboxes around February, depending on the types of investments you have. Deadlines can become delayed as security companies scramble to finalize tax consequences, so make sure to stay proactive. If you don’t have a financial advisor, you can contact the holding company directly. If you work with a financial professional, give the office a call. The 1st payment of your quarterly taxes is due on April 15th. 

As far as investments, there are a few things I’m keeping an eye on in the year ahead: Inflation, interest rates, and the mid-term elections. These events could impact the market in both positive and negative ways. I would like to see a continuation of the gains made in 2021. Although interesting, 2021 was an excellent year for the markets. Both the Dow and S&P 500 were up over 20%.

At Schott Financial Management, we offer free, no obligation consultations. You can call our office, 928-776-1031 or visit www. schottfinancialmanagement.com.

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer member FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge does not offer tax advice. Cambridge and Schott Financial Management are not affiliated.

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