Al Capone

Al Capone (By Mitch Mortensen Investment Advisor)

We’ve all read the articles on celebrities who have had problems with the IRS. Martha Stewart, Willie Nelson, Nicholas Cage, Wesley Snipes, and Pete Rose, to name a few, have all felt the long arm of the treasury department. But perhaps the most notorious of them all was mob boss Al Capone (AKA Scarface). Ironically, to his own defense he was quoted as saying “the government can’t collect legal taxes on illegal money”. He was never convicted for racketeering or murder, but he was given a hefty sentence of 11 years and a $50,000 fine for tax evasion. I bring up these examples to remind us all that the end of the year is upon us and we don’t want to miss anything with the IRS.

Charitable contribution: As you are thinking about giving this season, now is a good time to donate to a cause you believe in and deduct it from your 2016 taxes. It’s especially advantageous to donate appreciated stock, or other appreciated investments because you may avoid having to pay taxes on the gains.

Required minimum distributions: This is the minimum amount you must withdraw from your retirement account each year. You generally have to start taking withdrawals from your IRA, 401K, or other retirement account when you reach age 70½. Roth IRAs do not require withdrawals until after the death of the owner. Missing these withdrawals can bring steep penalties.

Max out retirement. Contribute the maximum to any retirement accounts that you legally can. In doing so, you can help minimize your tax bill. While you may be able to contribute to these plans until April 2017, why not do it now while it is on your mind. The same goes for health savings accounts (HSA).

Year end evaluation. It is always a good idea to sit down with an investment professional and / or tax professional to evaluate your investments before the end of the year.

Mitch is an investment advisor for Heaton Financial, PC. Contact Mitch to schedule a FREE financial risk analysis 435-272-4362.

This article was published in the Senior Sampler of Saint George on January 5, 2017. Click Here for a link to the actual article.