Three Year-End Deadlines That Are Actually in October

Year-end planning gets talked about as a December activity. Three of the decisions that matter most are effectively decided in October.

1. Charitable transfers that involve an asset rather than a check.

A gift of appreciated stock or a donor-advised fund contribution requires a custodian to move the asset and a receiving organization to accept it. That is measured in weeks, and December is the busiest processing period of the year. Custodian cutoff dates for year-end charitable transfers routinely land well before December 31. October is the last comfortable month to start.

2. Deferred compensation elections.

For executives with a nonqualified deferred compensation plan, the election covering next year's salary or bonus generally has to be made before that year begins, and it is typically irrevocable once filed. The deadline is set by the plan document, not the tax calendar, and it often arrives earlier than people expect.

3. Conversion modeling, if the answer is going to be useful.

A Roth conversion has to be completed by December 31. But the decision requires a projection of this year's income, a view of future rates, and a check against the thresholds the conversion might cross, including the Medicare surcharge two years forward. That analysis takes weeks. Started in December, it produces a rushed answer or no answer.

The pattern across all three is the same. The deadline is in December, but the decision is in October.

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Bellwether Wealth does not provide tax or legal advice. This material is provided for general informational and educational purposes only and should not be construed as individualized tax, legal, or investment advice. Tax laws and regulations are complex and subject to change, and their application depends on an individual's specific facts and circumstances. Before implementing any tax, retirement, charitable giving, estate planning, or other strategy discussed, consult with your CPA, tax professional, attorney, and/or other qualified professional regarding your individual circumstances. Advisory services offered through Bellwether Wealth, an SEC-registered investment adviser.