Monument Resource Center

Our clients hire us because they recognize the value of our Team’s unique, straight-forward, unfiltered opinion and our tailored advice designed to answer their questions, not everyone else’s. Below, you’ll find some of the most important questions we have been asked over the years to help you better understand the role we play and the advice we give.

Tax Strategies 101: 5 Concepts To Implement Before End of Year

As you may have noticed, the year is coming to a close. We’re with you, we thought we’d never get here either. It’s been a tumultuous time (particularly for investors) as economic forecasts have fluctuated fiercely in response to protests, politics, and the pandemic. Everyone has a ton on their plates, and we know that tax planning is probably the last item on your holiday to-do list— but let’s give it one more look. 

Sure, it’s not officially tax season… yet. However, implementing these 5 tax strategies before the end of the year will help you optimize your taxable income while you still can and give you a head start on the year ahead.

Consider a Roth conversion

If you’re looking to minimize your future tax burden (who isn’t?), a Roth IRA conversion can be one of the most effective approaches. By converting a traditional IRA account into a Roth, you’re able to pay taxes upfront on your existing savings, securing a tax-free source of retirement income for the future. 

Lower current tax rates, investments that have seen a decline in value, and reductions in taxable income are all factors that may signal a conversion is worth further consideration, depending on your particular situation and objectives.

Leverage tax-loss harvesting

If you’ve done well in the market this year and capitalized on your gains, you’re likely on the hook for capital gains taxes. By leveraging the practice of tax-loss harvesting, however, investors can sell any securities that have declined at a loss, offsetting the tax burden of gains from other investments. Subsequently, the proceeds of a sale can be reallocated to a similar security, allowing individuals to lower their tax bill while at the same time maintaining their desired asset allocation.

The inevitable caveat

There are some restrictions to this strategy. For example, losses must be applied in sequence— long-term losses must first be applied to long-term gains, while short-term losses must first be applied to short-term gains. Additionally, the IRS stipulates that these trades should not violate the “wash sale” rule, meaning that artificial losses can’t be claimed if the security repurchased is “substantially identical” to the security sold (and bought within a 61-day window). 

Tax-loss rules are relatively complex and will require careful consideration of claims and their qualifications. When deployed strategically, however, tax losses can be quite valuable over the long-term as they can be indefinitely carried forward and applied until they are exhausted.

Make charitable donations

For those fortunate enough to be in a position to help, charity can be a worthwhile way to make an impact. The government recognizes that philanthropy goes a long way in creating positive outcomes in American communities and that non-profit organizations need help now, more than ever. As a result, donors can both help charitable organizations and benefit their own bottom line by taking advantage of the numerous tax advantages charitable donations can offer— including additional benefits introduced this year.

In response to economic hardships brought on by the COVID-19 pandemic, the federal government introduced the CARES Act, providing various forms of financial relief for families and businesses alike. 

Along with offering assistance via payroll protection and stimulus payments, Congress also boosted tax benefits for charitable giving. In addition to expanding the Adjusted Gross Income (AGI) limit for cash contributions, the CARES Act allows for an “above-the-line” charitable deduction of up to $300 (even if your deductions aren’t itemized)!

Donor-Advised Funds

Although the recent CARES Act provisions are certainly a welcomed addition, tax-friendly charitable giving vehicles have existed for decades. Donor-Advised Funds (DAFs) are an especially tax-efficient structure for granting cash, securities, and other assets to a charitable organization. It’s also an added bonus for those who have recently sold a business since DAFs could be used to lower the tax bill from the sale. What’s more, the contributions themselves can be invested, allowing them to compound over time with years of tax-free growth. For those donating, this structure can offer a number of benefits, from minimizing capital gains taxes when appreciated stock is donated to being able to take an immediate deduction. No matter what cause you’re supporting, donating through a DAF may be able to give you more bang for your buck.

Contribute to tax-deductible accounts

Taking on the full spectrum of tax deductions can feel like an overwhelming task, and there’s likely to be a variety of contribution optimizations hiding right beneath your nose. From HSAs to 529s, many households are likely already contributing to accounts that offer tax minimization advantages.

Timing is everything…

It is important to carefully audit any account that offers tax-deductible contributions— particularly 529 college savings plans. Many states require that contributions to 529s be made by December 31st to be eligible for a tax deduction for the current tax year.

When it comes to optimizing for contributions, your state of residence also plays a particularly influential role. Deduction rules vary from state to state, making it even more important to know the deadlines ahead of time. Some states allow you to deduct contributions made past December 31st for the current tax year (although they are few and far between).

…most of the time.

Note that, when it comes to timing your contributions, there are a few investment vehicles that offer a little more flexibility. While Health Savings Accounts (HSAs) and IRAs also allow you to make tax-deductible contributions, their deadlines aren’t nearly as restrictive. You can contribute to an HSA or IRA as late as April 15th for the current tax year, relieving you of the need to go through a fire drill maxing out your contributions by December 31st. If you choose to go this route, be sure to talk to your employer to have your contributions coded for the proper tax year.

This is what we do.

During this time of year, it’s important to understand the big picture when it comes to your taxable income. When viewed from a holistic perspective, it is possible to identify unique opportunities to lower your tax burden. Investors must also remain cognizant of timing when it comes to these opportunities, ensuring they’re prepared to take appropriate actions before the year ends.

This may all seem like a daunting challenge to take on, and if you’re hoping to create a long-term tax optimization strategy, it won’t be easy to go it alone. When it comes to realizing the big picture, no one is better suited to help than the Team at Monument Wealth Management. Through a creative and collaborative experience called Private Wealth Design, we completely reinvented the act of planning for your future (an innovation that the finance industry desperately needed). 

Private Wealth Design isn’t the only thing that sets us apart from the sea of garden-variety investment advisors. On paper, we’re a wealth management firm— but in practice, we’re equal parts creative lab and brain trust. We’re outspoken critics of the finance industry, and we’re not afraid to question ideas that everyone else takes for granted. We’ll provide you with a tailored plan and specific advice, helping you create a blueprint for your financial future.

High Earners Eye Retirement

It’s time to find clarity around your finances and remove the anxiety of the unknown.

Read our case study, “High Earners Eye Retirement,” to see how we helped one of our clients with their wealth planning.

Ready for straightforward, unfiltered opinion and tailored advice for YOUR
questions, not everyone else’s?


Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“MCM”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.   

Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from MCM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. MCM is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.  

A copy of MCM’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at  

Please Note: MCM does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to MCM’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.  

Please Remember: If you are a MCM client, please contact MCM, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.  Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.