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With Trump, tax changes possible, so do these things now

Shopping for bargains isn’t the only financial tip for December. Consider the implications of possible tax reform in 2017 when you pay property taxes or make charitable donations.

Susan Tompor | Detroit Free Press | November 30, 2016

  • Pay attention to the rules for your Flexible Savings Account. Use the money you need by Dec. 31.
  • Review how much money you’ve had withheld in a 401(k). See if you can add more before year end.
  • Clearing out a closet? Make the donation by Dec. 31 if you want to itemize deductions for 2016.

Retired baby boomers must see if they need to withdraw money from their IRAs and 401(k)s.

To avoid costly penalties, retirees who are 70-and-a-half and older must take a required minimum distribution every year from traditional IRAs and 401(k)s before Dec. 31. An inherited IRA has this requirement, as well, said Sam Huszczo, owner of SGH Wealth Management in Southfield.

This rule does not apply to Roth IRA accounts.

In some cases, retirees have overlooked that Dec. 31 deadline and created painful tax headaches. Ignoring a required minimum-distribution deadline can trigger a 50% penalty on the amount that was required to be withdrawn.