Your Early 2019 Financial To-do List


You have probably reviewed your financial situations at the end of year 2018 and are thinking about plans for 2019.  Here are some starting points for you to consider to get your plan in place for 2019:

Adjust your retirement account contributions for 2019

  • According to IRS, the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000. The catch-up contribution limit for employees aged 50 and over remains unchanged at $6,000.
  • For an individual with family coverage, annual HSA contributions for 2019 are increased from $6,900 to $7000. Account holders ages 55 or older can contribute an additional $1,000. The contribution limits are indexed annually for inflation. However, in order to qualify for the contribution, an employee must be enrolled in one of employer sponsored HSA-qualified high deductible high premium health insurance plans.
  • For IRA contributions, the annual limit is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

Review your Insurance policies

If your situation has changed during 2018, such as change of job, birth of a new child, or purchases of new car, house, etc., review your insurance coverages or talk to your financial adviser to see if those coverages are still adequate to reflect these changes.

Brace yourself for continued market volatility that may affect your Investments in 2019

October 10,2018,  Dow Jones index and S&P 500 index fell almost 3%, and NASDAQ fell close to 4%. The world stock markets have been volatile ever since. Despite a strong labor market in the United States, entering 2019, the advisor at NorStar Financial believes the stock market volatility trend will continue, given the current geopolitical uncertainties: US-China trade disputes that affect the earnings of multinational corporations and perhaps, drag down global growth; and the flip and flops of so-called Brexit. Against these backdrops, financial professionals started doubting about the likeliness that the Federal Reserve will continue raising its federal funds interest rate. In addition, there are some signs of the softening of once hot US housing market. So, what are an individual’s defenses under these circumstances?

  • Now is especially important to make sure you have adequate emergency fund in place that suit your individual situations.
  • Have a sound investment policy that can guide you through these market ups and downs and stick to it.
  • Review your goals and sort them into near, intermediate and long term goals and make sure you have enough liquid assets to cover your near term goals.

Plan your education funding strategies for 2019

Following the enactment of Tax Cuts and Jobs Act (TCJA) in 2018, new tax law allows distributions from 529 plans to be used to pay up to a total of $10,000 of tuition per beneficiary (regardless of the number of contributing plans) each year at an elementary or secondary (k-12) public, private or religious school of the beneficiary’s choosing.

Don’t forget the deadline for individual tax filing is Monday April 15, 2019.

  • Gather and organize all your paperwork such as W-2 forms, bank statements, mortgage payment statements, property tax receipt, business expenses, investment statements from your broker-dealers, charity donation receipts, etc. for your 2018 tax filing.

*2018 Standard Deduction Chart

IF your filing status is… YOUR standard deduction is…
Single or Married filing separately $12,000
Married filing jointly or Qualifying widow(er) 24,000
Head of household 18,000
Sources: Internal Revenue Services
  • Child tax credit and additional child tax credit

For 2018, the maximum credit increased to $2,000 per qualifying child. Up to $1,400 of the credit can be refundable for each qualifying child as the additional child tax credit. In addition, the income threshold at which the child tax credit begins to phase out is increased to $200,000, or $400,000 if married filing jointly.

  • The AMT exemption amount

The AMT exemption amount is increased to $70,300 ($109,400 if married filing jointly or qualifying widow(er), $54,700 if married filing separately). The income level at which the AMT exemption begins to phase out has increased to $500,000 or $1,000,000 if married filing jointly.

  • 20% deduction on qualified business incomes. (sources: IRS)

The deduction is generally available to eligible taxpayers whose 2018 taxable incomes fall below $315,000 for joint returns and $157,500 for other taxpayers. It’s generally equal to the lesser of 20 percent of their qualified business income plus 20 percent of their qualified real estate investment trust dividends and qualified publicly traded partnership income or 20 percent of taxable income minus net capital gains. Qualified business income includes domestic income from a trade or business. Employee wages, capital gain, interest and dividend income are excluded.

Review your estate planning documents and strategies

  • Review

Usually, you only need to review your estate plan once every three years. Again, if there were major life events happened during 2018 you need to review your estate plan documents to see if they are still applicable to your current situations.

  • Annual Exclusion for Estates and Gifts

In 2019, the first $15,000 of gifts to any person are excluded from tax. The exclusion is increased to $155,000 for gifts to spouses.

Since 2018, the TCJA temporarily increased the basic exclusion amount for estate and gift taxes for tax years 2018 through 2025, with both dollar amounts adjusted for inflation. For 2019 the exclusion amount is $11,400,000 per individual, up from $11,180,000.