10 Financial Planning Tips from the AICPA to Start 2019 Off Right

NEW YORK–(BUSINESS WIRE)–The first few weeks of the new year are a perfect time for Americans to
ensure their financial house is in good order and set themselves up to
achieve their monetary goals. To help Americans best position themselves
for the year ahead, members of the American Institute of CPAs (AICPA)
share the following planning tips so the new year can bring a ‘new
financial you.’

1. New Year, New Plan
Quote: “One of my favorite tips
is to begin the year with a fresh plan. First you have to update your
balance sheet, so you know your starting point. Then set goals – reduce
debt or increase investments or something else – and attach a dollar
amount. Then, create the plan that will achieve the goals. It’s that
simple, but you have to know where you are now in order to determine
where you want to be.” – Lisa Featherngill, CPA/PFS member of the AICPA
PFP Executive Committee

2. Review 2018 Spending in Conjunction with 2019 Budgeting
“Early January provides an ideal window for reviewing prior year
expenses and developing a reasonable budget for the current year. Be
sure to strip out one-time nonrecurring expenses (i.e. emergency room
visit or housing repairs) and plot a course for 2019 spending that
includes a buffer for future unforeseen expenses.” – Michael Landsberg,
CPA/PFS member of the AICPA PFP Executive Committee

3. Review Automatic Payment Subscriptions and Renewals
“The start of the new year is the perfect time to review all the various
automatic payments and subscriptions set up in the past. Some expenses,
such as entertainment streaming services, a gym membership or an old
magazine subscription may no longer fit into your budget, lifestyle, or
new year priorities. It’s easy for money to slip away by losing track of
all the small payments scheduled through automatic payment methods. A
review of these payments can be part of your general new year clean-up
which feels so good and refreshing!” – Brooke Salvini, CPA/PFS member of
the AICPA PFP Executive Committee

4. Update Your Form W-4 for Withholding
Quote: “2018
saw major changes to individual taxes. The IRS substantially revised the
withholding tables in early 2018. Now that 2019 has begun, make sure you
have checked your withholding to see if you need more or less withheld
in 2019. Use Form W-4 and the related instructions to estimate how much
withholding you need. Also, you can use the IRS’s withholding calculator
at https://www.irs.gov/payments/tax-withholding
or contact your CPA or financial advisor for guidance.” – Julie Welch,
CPA/PFS member of the AICPA PFP Executive Committee

5. Make an Early Calculation of Your 2018 Taxes
“The new tax bill has likely made significant changes to your tax
opportunities. Don’t wait until April to understand what those
opportunities are for you. You may need to adjust your withholding,
change your charitable giving strategy, take advantage of new tax
brackets or depreciation rules among many other strategies. The sooner
you know your opportunities, the more impact they will have on your
finances.” – David Stolz, CPA/PFS member of the AICPA PFS Credential

6. Revisit Workplace Retirement Plan Contributions
“The beginning of the year is a great time to review your workplace
retirement plan contributions. Employees should strive to increase their
retirement plan contribution percentage from 2018. Pairing the deferral
increase with a salary raise is a painless way to boost retirement
savings. For example, if you received a 4% raise in salary and increased
your contribution rate by 2% your net paycheck and savings will both be
higher.” – Robert Westley, CPA/PFS member of the AICPA PFS Credential

7. Make a 2018 IRA and HSA Contribution (if you haven’t already)
“You have until April 15, 2019 to make eligible IRA and HSA
contributions for 2018. The combined traditional and Roth IRA
contribution limit is the lesser of $5,500 or your taxable compensation.
If you’re filing a joint return but don’t have any taxable compensation
of your own, you may still be able to contribute under the Spousal IRA
provisions. For an HSA, the contribution limit is $6,900 if you have a
family high deductible health plan (HDHP) or $3,450 for self-only HDHP
coverage.” – David Oransky, CPA/PFS member of the AICPA PFP Executive

8. Don’t Wait, Contribute to Your IRA Now
Quote: “For
married couples with Modified Adjusted Gross Income over $203,000, you
cannot make direct ROTH contributions. However, there are no income
limitations on doing a ROTH conversion or nondeductible IRA
contribution. So, you can make a nondeductible IRA contribution and
immediately roll it over into a ROTH. I just got back from my local
investment management branch and made my wife’s and my $6,000 IRA
contributions (up from $5,500 last year). As soon as the check clears, I
will roll the funds into our ROTH IRAs (called a “backdoor ROTH
contribution”). The reason why you roll it over immediately is if there
are no earnings in the IRA before it is rolled into a ROTH, there is no
income to pick up on the conversion. This doesn’t work if you have other
traditional IRAs that have untaxed earnings (whether it be from
unrealized gains or prior deductible IRA contributions), because you
have to aggregate all of the IRAs when determining the amount of the
taxable conversion.” – David Desmarais, CPA/PFS member of the AICPA PFP
Executive Committee

9. Take a Look at Your Current Allocation
“With increased market volatility during 2018, your various asset
classes may have drifted out of balance. Use the beginning of January to
analyze any material shifts that may have occurred due to 2018
performance. Diversification is important for managing portfolio risk,
so rebalancing may be necessary.” – Michael Landsberg, CPA/PFS member of
the AICPA PFP Executive Committee

10. Make Annual Exclusion Gifts to Heirs Now
“Consider making gifts to beneficiaries at the beginning of the year.
For those looking to reduce their estate tax exposure, individuals can
give up to $15,000 to an unlimited number of beneficiaries per year
without utilizing their lifetime estate tax exclusion amount or paying a
gift tax. Completing these gifts at the beginning of the year allows
your beneficiaries to receive a few additional months of potential
appreciation.” – Robert Westley, CPA/PFS member of the AICPA PFS
Credential Committee

These tips can help Americans improve their financial situation, support
the lives they want to live and ensure their loved ones are provided
for. To speak to a CPA financial planner for stories to help Americans
make positive financial moves in 2019, members of the media may contact
Jon Lynch jonathan.lynch@aicpa-cima.com
(212) 596-6033.

About the American Institute of CPAs

The American Institute of CPAs (AICPA) is the world’s largest member
association representing the CPA profession, with more than 431,000
members in 137 countries and territories, and a history of serving the
public interest since 1887. AICPA members represent many areas of
practice, including business and industry, public practice, government,
education and consulting. The AICPA sets ethical standards for its
members and U.S. auditing standards for private companies, nonprofit
organizations, federal, state and local governments. It develops and
grades the Uniform CPA Examination, offers specialized credentials,
builds the pipeline of future talent and drives professional competency
development to advance the vitality, relevance and quality of the

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and
Ewing, NJ.

Media representatives are invited to visit the AICPA Press Center at www.aicpa.org/press.

About the Association of International Certified Professional

The Association of International Certified Professional Accountants (the
Association) is the most influential body of professional accountants,
combining the strengths of the American Institute of CPAs (AICPA) and
The Chartered Institute of Management Accountants (CIMA) to power
opportunity, trust and prosperity for people, businesses and economies
worldwide. It represents 667,000 members and students across 184
counties and territories in public and management accounting and
advocates for the public interest and business sustainability on current
and emerging issues. With broad reach, rigor and resources, the
Association advances the reputation, employability and quality of CPAs,
CGMAs and accounting and finance professionals globally.

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