2021 & 2022 Year-End Reminders and Limits
Traditional & Roth
* Age 50 and older before year-end.
- 2021 Individual 401(k) salary deferral contributions must be made by the end of the year. Please have these contribution checks submitted to our office by Wednesday, December 22, 2021 to allow sufficient processing time. The salary deferral contribution limit for 2021 is $19,500 plus a catch-up contribution of $6,500 if you are age 50 or over. Company contributions must be made by the tax filing date of the company.
- Check your workplace retirement plan contributions to make certain you’ve adjusted for the increased limits.
- If you need to open a Retirement Plan Account prior to the end of the year, please contact Idelis Favole at 703-506-0030 or firstname.lastname@example.org to schedule an appointment with your advisor. The appointment must be scheduled before Friday, December 17, 2021. If you are unsure if you need to do this, please contact your advisor to discuss.
- Clients needing to take a 2021 RMD (Required Minimum Distribution) must do so by Dec. 31. In most cases we’ve already contacted you, but if you’ve not heard from us, please contact our office no later than Friday, December 17, 2021 to allow sufficient processing time for any necessary forms.
- If you are planning to make a (QCD) Qualified Charitable Contribution for the 2021 tax year, be sure to contact our office no later than Friday, December 17, 2021, to ensure adequate time for processing. QCDs are available for those over the age of 70-1/2.
- Please note that in most cases, checks are made payable to Pershing LLC unless the account is held directly at a mutual fund company. If you have any questions, please contact our office. Please put the account number and the tax year of the contribution in the memo line.
- Unlike contributions, a Roth conversion must be done by Dec 31stto be counted in the current year, and it can no longer be undone afterwards. So, calculate tax brackets carefully in advance and consult your tax advisor. Also, there is a possibility that new tax laws might eliminate the Roth conversion option for some of you in future years.
- A Backdoor Roth IRA may involve a slight audit risk, but if you are looking to do one for 2021, please ensure that both a Roth and a Traditional IRA are opened by Friday, Dec 17, 2021. Backdoor Roth contributions may be eliminated by pending legislation.
- If you have an FSA at work, you should look into using any leftover funds before Dec 31st. Some limited FSA funds can be rolled over to next year, but mostly it is use-it-or-lose-it.
- If your state has a tax deduction for 529 plans (not all states do), then be sure to contribute the annual limit to your accounts before Dec 31st. (Do not exceed the annual gift amount of $15k per individual, per child. If you are contributing more, speak to us.)
- Be certain to submit sufficient taxes to the IRS, prior to December 31st to avoid penalties (especially if you had any unusual events like the sale of a home or Roth Conversions, etc.). Talk with your tax advisor to get up-to-date estimates.
This material is provided for general and educational purposes only; it is not intended to provide legal, tax or investment advice. All investments are subject to risk. Please consult an independent legal or financial advisor for specific advice about your individual situation.
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.
Registered Representatives offering securities and advisory services through Cetera Advisor Networks LLC, member FINRA/SIPC, a broker/dealer and a Registered Investment Adviser. Cetera is under separate ownership from any other named entity.