The heading of this post is, as usual, a myth. You can save money this year. Thanks to WealthManagement.com for some of these tips:
1. I think all parents of college-bound kids are aware of the FAFSA. There is no charge for this application for student aid. And the early bird gets the worm; funds are limited.
2. Start or increase your 401(k) contributions, especially if you’re not taking full advantage of company matching.
3. Considered Traditional or Roth IRA contributions, especially for non-working spouses and your kids. If your kids have earned income, the full amount (up to $5500) can be shunted into a Roth IRA. IRA planning is complex and the best strategies depend on a careful analysis of your retirement expectations.
4. Max out Health Savings Account contributions ($3350 for singles, $6650 for couples and families). As with IRAs if you’re over age 50 you can kick in an extra $1000/yr. This money can be triple tax free!: Contributions are deductible, earnings are tax-deferred, and withdrawals are tax-free if used for legitimate medical expenses (see IRS pub. 969).
5. If you did a Roth conversion at the peak of the market in 2015, you have until 10/15/2016 to re-do it. If your Roth is worth less than when you converted, you un-convert or “recharacterize” it, and then reconvert at the lower value thereby reducing your tax bill accordingly.
6. Have a neutral, unbiased, fiduciary adviser (like me) analyze the fees and expenses in your portfolio. This is especially important in the later years when you should be conservatively allocated because taxes and fees from excessive turnover can consume your earnings.