documenting your out-of-pocket outlays over the previous year.


STRATEGY 3: Round up your investment documentation.


Around this time of year, W-2s and 1099s, which report various types of income you may have received, will soon be arriving. Bear in mind, however, that the deadline for sending out 1099s is a bit later than other forms you might receive, like W-2s; it is mid-February and even later for some investment providers. If you want to get a jump on your taxes but still do not have all of the documents you need, you may be able to get the information you seek by hopping online with your investment providers; firms typically main- tain “tax centers” where you can download and/ or print out the relevant forms, including 1099s that have not yet arrived or that you have mis- laid. Do not just stuff your 1099s in a folder; also take a moment to see if you can learn anything that might help you improve your portfolio.


STRATEGY 4: Knock off your contributions as soon as possible.


property taxes), which are now capped at $10,000 per household; charitable deductions; home mort- gage interest (note the changes in the rules that went into effect in 2018); and medical expenditures in excess of 7.5 percent of adjusted gross income. Armed with information about whether you


will itemize or claim the standard deduction, you can then know whether you need to round up supporting documentation. If you are claim- ing the standard deduction, you will not need to bother, but if you are itemizing, you will. If you are aiming to find documentation of your


deductible expenses but can not track down all of the receipts you need, do not despair. The previ- ous year’s credit card statements, which you can retrieve online, can help you identify expenses you incurred over the past year; if your credit card company prepares an annual accounting of your expenditures organized by category, that can pro- vide an invaluable tool to your deductible expens- es. Healthcare providers and pharmacies are also usually happy to prepare a year-end statement


Your deadline for contributing to an IRA or health savings account is the same as your tax-filing deadline. But that does not mean you need to wait until you get your taxes in to tackle those tasks. In fact, if you want to deduct your health savings account or IRA contribution on your tax return, you will need to make that contribution before you file your return. Ditto if you are taking advantage of the Saver’s Credit. Note that these deductions are available to you whether you itemize your deductions or not. Even if you are not deducting your contribu-


tion (you are making a Roth IRA contribution, for example), there is an opportunity cost to waiting until the last minute to make these contributions. Those opportunity costs can add up if you are a serial procrastinator. Assuming you invest in something that goes up more often than it goes down, you will lower your return by waiting until your tax-filing deadline each year. Of course, from a practical standpoint, some in-


vestors wait to make those contributions because they want to see what their tax bills are first. If that describes your situation, consider signing on for an automatic-investment program for your future IRA contributions so you are not at the mercy of your tax bill each year. For the 2020 tax year, investors under age 50 can hit their full $6,000 maximum IRA contribution by putting in an even $500 a month; those over 50 can max out with a $583.22 monthly contribution. •


Nina Azwoir, First Vice President of Investments, Wintrust Wealth Management. © Morningstar 2020. All Rights Reserved. Used with permission. Securities, insurance products, financial planning, and invest- ment management services offered through Wintrust Investments, LLC (Member FINRA/ SIPC), founded in 1931. Trust and asset management services offered by The Chicago Trust Company, N.A. and Great Lakes Advisors, LLC, respectively. Investment prod- ucts such as stocks, bonds, and mutual funds are: NOT FDIC INSURED | NOT BANK GUARANTEED | MAY LOSE VALUE | NOT A DEPOSIT | NOT INSURED BY ANY FEDERAL GOVERN- MENT AGENCY. See ad on page 2 >


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WINTER 2021


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