Before You Toast in the New Year, Be Sure to Have Your Year-End Finances in Check; CFA Institute Provides Investors With a Checklist of End-of-Year Financial Deadlines to Help with Financial Planning for 2005.CHARLOTTESVILLE, Va. -- December 31 not only signifies the end to the calendar year, but also marks the last day for investors to complete their year-end financial planning Financial planning
Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against prior to the start of 2005. While investors' thoughts during the holiday season may be more focused on gift lists than economic checklists, it is important to be mindful of the looming end-of-year deadlines that may affect 2004 taxes and 2005 financial planning. CFA Institute The CFA Institute is headquartered in the United States Of America at Charlottesville, Virginia with offices in Hong Kong and London. Formerly known as the Association for Investment Management and Research (AIMR), the Institute awards the prestigious Chartered Financial Analyst , the administrator of the Chartered Financial Analyst Chartered Financial Analyst (CFA)
An experienced financial analyst who has passed examinations in economics, financial accounting, portfolio management, security analysis, and standards of conduct given by the Institute of Chartered Financial Analysts. (R) (CFA (Computer Fraud and Abuse Act of 1986) Signed into law in 1986, the CFA was a significant step forward in criminalizing unauthorized access to computer systems and networks. The Act applies to "federal interest computers" that include any system used by the U.S. (R)) program worldwide, has compiled a list of the year-end deadlines and tips for getting investors' finances in order prior to New Year's Eve.
"Many investors do not even begin to think about their finances until early in the year, closer to April 15. But by waiting that long, you might miss out on some important deadlines that may impact your taxes and portfolio," said Bob Bilkie, CFA, president of Sigma Investment Counselors in Southfield, MI. "Year-end is a great time to give your portfolio a checkup check·up
1. An examination or inspection.
2. A general physical examination.
checkup See Yearly checkup. and may even result in maximizing your after-tax wealth."
CFA Institute compiled the following tips and deadlines to help investors plan their year-end finances.
1. Recognize Retirement Planning Retirement financial planning refers to a collection of systems, methods, and processes which, in their aggregate, support a family unit's (client's) desire to achieve a state of financial independence, such that the need to be gainfully employed is optional. Deadlines. The end of the year brings numerous deadlines for retirement planning. December 31 is the last day to establish and fund a solo 401(k) and is the last day to complete the year's contributions to employee-sponsored 401(k) plans. It also is beneficial to make annual Traditional or Roth IRA Roth IRA
An individual retirement plan that bears many similarities to the Traditional IRA. Contributions are never deductible, and qualified distributions are tax-free. A qualified distribution is one that is taken at least five years after the taxpayer established his/her first contributions at this time, up to $3,000 (people 50 and older can put in an extra $500). Although investors have until April 15, 2005 to make a 2004 IRA Ira, in the Bible
Ira (ī`rə), in the Bible.
1 Chief officer of David.
3 Two of David's guard.
IRA. contribution, the sooner an investor invests his money, the more time it has to potentially benefit from compound growth. Keep in mind that December 31 falls on a Friday this year and is the absolute last day to wrap up many transactions.
2. Make Charitable Donations and Gifts for the Year. December 31 is the last day to make tax-deductible charitable donations. By giving appreciated securities such as stocks that have been owned for more than one year, investors can realize significant tax savings. Investors who give in the form of an appreciated security will be able to deduct the current value of charitable contributions charitable contribution n. in taxation, a contribution to an organization which is officially created for charitable, religious, educational, scientific, artistic, literary, or other good works. at the time of the donation from their adjusted gross income while avoiding future capital-gains taxes. In addition, you can give up to $11,000 per person and pay no gift tax, but the deadline for 2004 is December 31.
3. Re-Evaluate Stock Market Holdings. To offset capital gains, investors may want to review their portfolio and sell stocks that have declined in value. If losses exceed gains, an investor can deduct up to $3,000 of losses from ordinary income. If there are large, long-term capital gains Long-term capital gain
A profit on the sale of a security or mutual fund share that has been held for more than one year. in a portfolio that you have cashed in over the past year, you will generally be taxed at 15 percent, which is beneficial when taking into account that the top rate on ordinary income is 35 percent.
"This year, capital gains rates were among the lowest in decades," said Bilkie. "Capital gains could be going up next year and if you do have capital gains on stocks, take that into consideration and perhaps sell."
4. Re-Evaluate Financial Goals. Use the holiday time to reevaluate your financial goals and make plans to help you succeed in achieving them. If your priorities and goals have changed during the year, then make sure your portfolio is engineered to help you meet these changes.
"A cost saving tip is to organize your records during some of the holiday downtime," said Brian Breidenbach, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. , CFA, managing principal of Briedenbach Capital Consulting in Louisville, KY. "Having organized records, especially information such as the original price of an asset, can save you time and money down the road."
5. See Where You Stand. Before investors can recognize what needs to be completed by end-of-year, it is helpful to make projections of 2004 income taxes. Additionally, check to see if you will have to pay the Alternative Minimum Tax (AMT See vPro. ) before assuming deductibility of expenses. Investment activities play a major role in how much AMT an investor may pay and could affect how to qualify private activity bonds, qualified small business stock, incentive stock options and investment expenses.
"Be prepared this year and know the important financial deadlines," said Briedenbach. "Remember that proactive planning is always better than reactive planning “Dynamic planning” redirects here. For the anime studio, see Dynamic Planning.
In artificial intelligence, reactive planning denotes a group of techniques for action selection by autonomous agents. These techniques differ from classical planning in two aspects. . By taking inventory of what you own and may owe, you'll ring in the new year with a renewed sense of confidence. Make this year's resolution to make financial planning a year-round exercise in 2005."
About CFA Institute:
CFA Institute is the global, non-profit professional association that administers the CFA curriculum and examination program worldwide and sets voluntary, ethics-based professional and performance-reporting standards for the investment industry. CFA Institute has 76,000 members in 116 countries. Its membership includes the world's 57,000 CFA charterholders, as well as 130 affiliated professional societies in 51 countries. CFA Institute is headquartered in Charlottesville, Va., with additional offices in London and Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. . It was formed as the Association for Investment Management and Research in 1990 from the combination of the Financial Analysts Federation (formed in 1947) and the Institute of Chartered Financial Analysts (formed in 1962). More information may be found at www.cfainstitute.org or by calling 1-800-247-8132 or 1-434-951-5499.
Note to Editors:
The Chartered Financial Analyst(R) (CFA(R)) program is a globally recognized standard for measuring the knowledge and commitment of investment professionals. Those who have earned the CFA charter have completed a rigorous, three-year course of independent study that includes three sequential, six-hour exams on securities analysis, financial accounting, quantitative analysis Quantitative Analysis
A security analysis that uses financial information derived from company annual reports and income statements to evaluate an investment decision.
Notes: , economics, portfolio analysis, ethics and professional standards. "Chartered Financial Analyst(R)" and "CFA(R)" are trademarks owned by the CFA Institute. Therefore, "Chartered Financial Analyst" should always be capitalized, and both the full name and the letters CFA should be used as adjectives to quality nouns. It is also appropriate as a three-letter designation after an individual's name. Examples: "James Smith James Smith is the name of: People named James Smith