Your Financial Check-Up

By Luma Wealth on July 7, 2020


Time for a Mid-Year Review


This year, it’s more important than ever to conduct a mid-year financial review. In addition to a potential change to your financial situation, there are new rules and deadlines that went into effect as a result of the coronavirus.

Below is a checklist to help you stay in control of your finances and minimize your tax burden — and your Luma Wealth team remains available to answer your questions and guide you.

Pay your taxes on time. The deadline for filing your 2019 return has been extended to July 15th, 2020, which is just around the corner. However, as in a normal tax year, you can request an extension to file on or before October 15th. Your 1st and 2nd quarter 2020 estimated tax payments are due on July 15th as well. If you’d prefer, you can pay your federal and Ohio state.

Adjust your withholdings if anything has changed. A major life event, such as a change to your (or your spouse’s) employment status, marriage or divorce or having a baby can alter your tax liability. If so, now is a good time to review and adjust your withholdings, as necessary, to avoid penalties. In addition, given the challenging business environment, some employers are making temporary reductions to salaries and adjusting bonuses. If this applies to you, be sure to update your 2020 tax projection to avoid surprises.

Redeposit Required Minimum Distributions (RMDs). On June 23rd, the IRS announced that RMDs are waived for all of 2020 and the 60-day rollover rule has been extended to allow you to “return” any RMDs you’ve already taken into a qualified retirement plan on or before August 31, 2020 to avoid a tax. If you do not need the distribution, you can continue to benefit from tax-advantaged savings on these assets.

Maximize retirement contributions. If you are self-employed, you have until the filing deadline of your tax return to maximize contributions to a self-employed persons retirement plan (SEP or Solo 401(k)). In addition, the CARES Act includes several provisions to help investors save for retirement. If you are taking advantage of the IRA RMD waiver for 2020 and your IRA balance is lower than pre-pandemic levels, consider a partial Roth IRA conversion in an amount similar to what your RMD would have been.

Keep track of deductible expenses. Deductions are hard to come by these days, but charitable contributions are still a great way to mitigate your tax bill. Bunching deductions, donating highly appreciated stock and/or using a donor advised fund are three ways to strategically manage your charitable giving and enhance your tax savings. And if you itemize, remember to save receipts for tracking deductible expenses.

A mid-year review of your financials can help to minimize your tax burden in a year unlike any other. Need assistance? Your Luma Wealth advisor is happy to work with you and your tax professional on your financial check-up.

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Luma Wealth is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC. All information referenced herein is from sources believed to be reliable. Luma Wealth and Hightower Advisors, LLC have not independently verified the accuracy or completeness of the information contained in this document. Luma Wealth and Hightower Advisors, LLC or any of its affiliates make no representations or warranties, express or implied, as to the accuracy or completeness of the information or for statements or errors or omissions, or results obtained from the use of this information. Luma Wealth and Hightower Advisors, LLC or any of its affiliates assume no liability for any action made or taken in reliance on or relating in any way to the information. This document and the materials contained herein were created for informational purposes only; the opinions expressed are solely those of the author(s), and do not represent those of Hightower Advisors, LLC or any of its affiliates. Luma Wealth and Hightower Advisors, LLC or any of its affiliates do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax or legal advice. Clients are urged to consult their tax and/or legal advisor for related questions.