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Kent Thune

7 Reminders and Tips for Year-End Investing and Taxation

By December 16, 2012

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Every year there are certain items that investors need to do in preparation for taxes and investing in the new year.  I've put together a convenient list of links to strategies and must-do's for investing and taxes before the year ends.

If you like a bit more detail with your lists, please check out my Year-End Checklist for Investing and Taxes article.  Without further ado, here is the list of links:

  1. Consider Tax-Loss Harvesting: Expecting capital gains?  You may want to produce some capital losses to offset the gains. If you have a regular brokerage account, where you may have capital gains and/or capital losses, you will be wise to see how you can take advantage of tax loss harvesting.
  2. Understand the 1099 Form and What to Do With It: Do you expect a 1099 for this tax year? Which type of 1099 do expect? What should you do with it? If you receive a 1099, does it mean you owe taxes? There are more than a dozen different types of 1099 forms.  Know the differences and be ready for taxes around the corner.
  3. Watch for Mutual Fund Capital Gains Distributions: You may not have bought or sold any mutual funds during the past year but you could still have taxes on capital gains because of trades placed within the fund by the manager.
  4. Know Your Risk Tolerance: Your investment portfolio should be built upon only two primary factors -- your risk tolerance and your investment objectives. Did you move your investments around during the previous year based upon economic, market or political reasons, such as the fiscal cliff?
  5. Plan Your Asset Allocation Tactics: If you like to do more than just buy-and-hold but you're not quite a market timer, the end of the year is often a good time to review your tactics and strategies for the New Year.
  6. Analyze Your Mutual Funds Performance:  If you are actively trying to beat a benchmark, such as the S&P 500, or if you want to check to see if your mutual funds are outperforming their respective category averages, now can be good time to be sure your funds are up to par.
  7. Rebalance Your Portfolio: Rebalancing is not typically necessary more than once per year. If you are  passive investor and don't like to make significant changes to your portfolio, you may want to consider rebalancing now.  This way, you'll return your portfolio investments to their original target allocation percentages and be prepared for a New Year.

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