Prepare for 2017 With This Financial Checklist

December is a good time to review your year-to-date compensation, investment earnings, taxes, charitable donations, retirement contributions and financial gifts to family members. A great place to start is to compare these numbers with last year’s information and decide if you need to take action before the end of the year.

Don’t wait until December 30. By then it might be too late to get any necessary forms created, signed and submitted on time.

Retirement Plan Contribution Review

Have you maxed out your 401(k)? The contribution limit for 2016 is $18,000 for those under 50. If you’re over 50, you can contribute an additional $6,000 a year. Check your paystub or 401(k) website to confirm that you have maxed out your 401(k) contribution. If not, you can increase your contribution rate through your account on your custodian’s 401(k) website. Confirm with your HR department that the change will take place before the last pay period of the year.


Review your last paystub to check your year-to-date compensation, comparing it with last year’s number for the same time period. Has your total compensation increased or decreased? If you are self-employed, this preparation will be helpful in preparing for your estimated tax payments in January. (For related reading, see: Year-End Finance Tips for Small Businesses and Freelancers.)

Investment Tax Review

Review all of your taxable investment accounts to familiarize yourself with the year-to-date realized gains/losses and dividends for each. Then compare the taxes you’ve paid and your investment earnings with last year’s totals through the same time period. Are you expecting to pay more and or less than last year?

Charitable Donations

This is a good time to review the charitable donations you’ve made to date to determine whether you’d like to donate anything further. From a tax perspective, any additional donations may benefit your income tax picture based on your compensation and investment tax liability changes from the previous year. From a personal perspective, you may simply be motivated to enlarge your giving. In addition to donating cash, many nonprofits give you the option of gifting appreciated securities directly—which saves you from selling that security and realizing a taxable gain. 

Check your closets for clothes or unused stuff in your garage that can be gifted to Goodwill, the Salvation Army or other charities in your area that can potentially benefit someone in need. (For related reading, see: Give to Charity; Slash Your Tax Payment.)

Financial Gifts to Family Members

Do you normally gift money to children, grandchildren, or other family members? The deadline to gift funds to another person is December 31, 2016. You can gift up to $14,000 ($28,000 for a couple) to an individual tax-free without needing to file a gift tax form with your tax return. 

IRA Required Minimum Distributions

Those of you who are at least 70.5 years old are required to take a distribution from your IRA(s) based on IRS tables. You are allowed to gift all or a portion of your required distribution directly to a charity, which would decrease your taxable distribution. If you do so, make sure you notify your CPA of this, as it will reduce your taxable income for 2016.

IRA/Roth IRA Contributions

You have until April 15, 2017 to make your 2016 IRA contributions, so you don’t need to make them before the end of the year.