Year-End Financial Checklist

Year-End Financial Checklist

2022 has been a difficult and trying year for stock and bond indexes in both emerging and developed markets. We are on pace to post the first double-digit loss in the major US markets since 2008. After a run of 13 years, it is understandable for investors to want to close their eyes and wait for the storm to pass. However, in times of market runoffs, it is important to review your finances and check the boxes on year-end tasks to ensure you are well-positioned for when the markets rebound. Here is our list of things to consider as we come to the end.


Employer-Sponsored Accounts such as 401(k) and 403(b)

The maximum contribution amount for these respective accounts is $20,500, with an additional catch-up contribution limit of $6,500 for individuals aged 50 or older. We are advocates of trying to contribute the maximum amount to these accounts every year. However, if your budget doesn’t allow for that level of contribution, we encourage you to contribute at least enough to receive your full company match, if that is offered. As we look forward to 2023, the IRS recently announced that the contribution limits for employer-sponsored retirement plans are going up. You may want to review your contribution amounts and adjust for January payrolls if your goal is to maximize funding your retirement plan contributions. 

IRA Accounts

For Roth IRA and traditional IRA accounts, the maximum contribution amount is $6,000, with an additional $1,000 allowed if you are age 50 or older. Bear in mind that IRA accounts do have income restrictions so it is important to work with your financial advisor or tax preparer to determine if you are eligible to contribute in 2022. Assuming you are eligible, these accounts can be quite tax advantageous for your overall financial situation.

529 College Savings Plans

For 529 plans, contribution amounts are tied to annual/lifetime gifting limits. The gift limit for 2022 is $16,000. However, there is a provision that allows for five years of gifting to be given in one year so long as it is accounted for. Should you decide to contribute more than $16,000 in 2022, we would recommend that you work with your tax professional to ensure that you are properly documenting the gift. The deadline for 529 contributions is December 31, 2022. The owners of a 529 account receive tax benefits on the growth of the investment account and may also receive state tax benefits depending on each state plan.

Health Savings Accounts (HSA) & Flex Spending Accounts (FSA)

Depending on your employer’s benefits package, you may be eligible for an HSA or FSA account. Both of these respective plans offer generous tax benefits, but the two plans have significant differences. Here is a great side-by-side comparison of the two plans.

These plans will not be offered to everyone and have restrictions for use. I would encourage you to check with your employer to see if these accounts are an option. 



Tax Loss Harvesting

If there is a silver lining to this year’s market sell-off, it is the opportunity to harvest tax losses. Investors have until year-end to realize capital losses by selling poorly performing investments. Losses can be used to offset capital gains and reduce your tax liability. Tax loss harvesting requires careful consideration and awareness of certain restrictions (such as the wash sale rule), but if done correctly, it can be a powerful way to defer taxable gains. In addition to offsetting taxable gains, the IRS allows investors to deduct up to $3,000 worth of unused losses against their income tax liability. Any remaining unused losses can be carried forward indefinitely to be used in future tax years.

Gifts and Charitable Donations

Charitable donations are another common way of reducing taxable income. Taxpayers can claim a deduction of up 30% of adjusted gross income (AGI) for charitable gifts of non-cash assets, and up to 60% of AGI for gifts of cash (note that the temporary provisions allowing deductions up to 100% no longer apply in 2022). While charitable donations have fallen out of favor somewhat in recent years due to increased standard deductions amounts, there may still be opportunities for tax-efficient gifting, such as donating highly appreciated assets or making a qualified charitable distribution (gifting from an IRA).

Those looking to manage their exposure to gift and inheritance tax also have until December 31 to make use of the annual gift exclusion amount. For 2022, a taxpayer can give up to $16,000 to as many people as they wish without reducing their lifetime gift and estate tax allowance.

Roth Conversions

For some, 2022 may present a good opportunity to convert some money to Roth. If your income has reduced significantly you may have an opportunity to convert money to Roth at a lower tax bracket than you have been in years past. Once the money is in the Roth bucket, it can grow tax-free. There are many factors at play to determine if a Roth conversion makes sense, some of which include the following: 1) income received year-to-date, 2) capital gains/dividends/interest from investments, and 3) projected future tax brackets. Before making a decision, coordinate a discussion with your accountant and financial advisor (sometimes a quick three-way can be very impactful!). If a Roth Conversion is part of your strategy for the 2022 tax year, it must be completed by 12/31/22.



Beneficiary Updates 

The closing out of a year provides a great opportunity for us to take stock of the events of that year and determine if any changes need to be made. Beneficiary designations are often overlooked as our lives change. Marriages, divorces, children growing from minors to adults, and individuals passing away all represent significant events and will likely warrant changes to the beneficiaries listed on our retirement accounts, life insurance, and estate plans. We recommend reviewing your beneficiary designations on an annual basis unless you have major changes in your life.

Insurance Amounts 

Another overlooked area of a sound financial plan is insurance coverage and their respective coverage amounts. We should review our personal insurance coverage yearly as our assets and liabilities change. If we complete a major improvement to our home or experience significant real estate appreciation, there may be a gap in our homeowner’s coverage. It is our recommendation to work with your insurance professional to better understand the replacement coverage in your homeowner’s insurance policy. You may also be overexposed to personal liability if your net worth has grown significantly through market gains or company stock options for example. This is where a personal umbrella policy can help to pass some of the liability risk to the insurance company. 

We are happy to discuss any of these items in greater detail and how they may apply to your specific situation. The end of a calendar year can become hectic with holidays, gatherings with friends and family, and ringing in a new year. Taking the time now to review your financial situation and checking a few of these items off of your list will help you start 2023 off on the right foot.




Nate Condon is one of the co-founders and managing partners of Walkner Condon Financial Advisors. He is a fee-only, fiduciary financial advisor who works with clients locally in Madison and around the country.

What Should I Do with My 401k After Leaving a Job?

What Should I Do with My 401k After Leaving a Job?

One of the first things that people think of when they leave their job is what to do with their 401(k) from that employer. While there is plenty of advice out there, much of it could be conflicted with pre-existing bias, depending on what benefit certain people or entities have in moving it or making it stay put. Hopefully, the options below will assist in your decision-making process as you decide what to do with your old 401(k). 

Three Options for Your Old 401(K)

For those looking for a quick and dirty list of your potential options for the 401(k) from your previous employer, that’s below. We dive further into each possibility and its pros and cons in the rest of this piece.

  1. Leave It
  2. Roll It Into Your New Plan
  3. Roll It Into an Individual Retirement Account (IRA)

Note: if you have a Roth of after-tax option, it does not impact the advice given here, though there are some nuances to Roth that should be explored as well.

Related Reading: What to Do With An Old 403(b)

1. Leave Your 401(k) With Your Previous Employer’s Plan

In most cases with 401(k) plans, as long as you have a balance that is large enough, you are not forced to do anything. Your investment options will likely remain the same, and you are simply put in a “separated service” section of participants. The pros of selecting this option? You will still have the ability to receive reports and reallocate the assets when you see fit. While you cannot contribute to it, you may hold it at the investment company. It’s not always the case, but typically, the larger the 401(k) plan, the lower the expenses. There can be some economies of scale that may allow you to reduce prices on some of your funds as well as administrative costs. 

The downside to leaving it there is that any changes to the 401(k) product company or investment lineup will impact you. If you like a particular fund and the plan sponsor gets rid of it, you will not be able to keep it. You are also governed by the plan document of the plan, which is basically the instructions that the participants have to follow. There can be additional fees that are passed down to participants as well, including potential financial advisory fees.  


2. Move Your Old 401(k) to Your New Employer’s Plan

If you are moving to a new job and you are offered another 401(k) plan, regardless of whether or not you are eligible to contribute funds out of your paycheck, you should be able to roll your existing 401(k) balance into the plan. This will be a tax-free event, and you will have to select new funds out of the lineup your plan sponsor offers. You likely will have to call your previous 401(k) company to initiate this rollover, and in many cases, there is paperwork involved. This allows you to consolidate your assets into one 401(k) plan for potentially better continuity in your investments. 

The downside is that fees may not be lower than your previous plan and the investment lineup will also be different. You could have fewer choices than your last plan, as well, so you will want to do a full side-by-side comparison of each plan’s investment options, expenses, and documentation to assure that this is the best option for you.

3. Roll Your Old 401(k) into an IRA

The “I” in IRA stands for individual. If you prefer to have more control over your assets, this may be a viable option. This involves contacting your previous employer and instructing them where to send the assets. It will remain free of taxation if you move the assets to an IRA held at a financial institution for your benefit (also known as FBO). For example, the check could be made payable to Charles Schwab FBO Jane Smith. An IRA is just a checkbox from the IRS, in that there is a significant amount of choice available to you in investment options. You may buy stocks and bonds, ETFs, mutual funds, real estate, cryptocurrencies, savings accounts, and many other options. 

The downside to rolling your old 401(k) into an IRA might come down to choice. There can be an overwhelmingly large amount of choices. Each choice carries its own risk and fees as well. Many financial advisors often recommend that clients roll their assets into IRAs. 

But this isn’t free of conflict. In many cases, financial advisors cannot receive compensation in the 401(k) plan, but can if they roll it into an IRA. Before you choose to move your assets into an IRA, you should consider the management fees, expenses, and objectives of your investment versus other alternatives. 

Considering the options above is essential to your future financial picture. Making the right choice can be very important, so take your time to understand how each option impacts you.




Clint Walkner is one of the co-founders and managing partners of Walkner Condon Financial Advisors. He is a fee-only, fiduciary financial advisor who works with clients locally in Madison and around the country.

What Assets Get a Step-Up in Basis at Death?

What Assets Get a Step-Up in Basis at Death?

With the death of a loved one, one question we often get is, “What assets are entitled to a step-up in basis and what assets aren’t entitled to a step-up in basis at death?” To define what we mean by step-up in basis, sometimes referred to as stepped-up basis, here is an example:

Your mother purchased 100 shares of XYZ company at $10 per share in 1950, costing her $1,000, which is her “basis.” She holds the shares without selling until she passes away in 2022. The share price is $1,000 per share at her date of death. 

Despite the fact that she has a significant gain of $99,000 in this example, the basis “steps up” on the date of death to the share price on that date – or $100,000. If the beneficiary of this stock decides to sell it a few months later, their basis is $100,000 and the gain or loss is simply the value of the shares sold minus the basis. For example, if they were sold at a value of $110,000, they would owe tax on $10,000 of capital gains (and in this case, short-term capital gains).

Examples of Assets That Step-Up in Basis

  • Individual stocks, bonds, mutual funds, and exchange-traded funds (ETFs) held in taxable accounts.
  • Real estate – this includes many forms, such as multi-family residences, primary residences, vacation homes, and office buildings. 
  • Businesses and the equipment in the business.
  • Art, collectibles, home furnishings – such as antiques that may have increased in value.
  • Cryptocurrencies.
  • Non-fungible tokens, or NFTs.

Examples of Assets That Do NOT Step-Up in Basis

  • Individual retirement accounts, including IRAs and Roth IRAs.
  • 401(k), 403(b), 457 employer-sponsored retirement plans and pensions.
  • Real estate that was gifted prior to inheritance.
  • Tax-deferred annuities.

We encourage our clients to seek out the counsel of a qualified estate planning attorney to plan out their wishes and assure that they are making good choices regarding future taxation of their assets and avoiding unintended consequences of their actions.

Note: We are not CPAs. Please consult a tax professional if you have any tax questions specific to your own personal situation.




Clint Walkner is one of the co-founders and managing partners of Walkner Condon Financial Advisors. He is a fee-only, fiduciary financial advisor who works with clients locally in Madison and around the country.

Recency Bias and the Fed’s Interest Rate Hikes

Recency Bias and the Fed’s Interest Rate Hikes

On every vacation we go on, my kids say something to the effect of, “This is the best vacation ever!” I typically follow up that statement with the question “What about that other vacation you said was the best?” And they respond, “Oh yeah! That was my favorite too!”

Is each vacation we take truly the “best” we’ve ever been on? Are we just upping the ante and topping each trip we take with a more exciting one? Nope. So then why do they think that each vacation we take is the best ever? Recency bias.

Recency bias is a cognitive predisposition that causes people to more prominently recall and emphasize recent events compared to those that occurred further in the past. My kids claim our current vacation is the best because it’s fresh in their minds, and they remember it most clearly.

When it comes to investing, recency bias shows up in many different ways: picking a stock or fund based on a recent surge in performance, overweighting a particular asset class due to recent outperformance compared to other sectors, assuming the current bear or bull market will continue, and generally losing sight of longer-term trends in things like gas prices, interest rates, and inflation.

Look no further than the current discussion of the federal funds rate. For reference, the current federal funds rate is 3.25%. A year ago it was .25%. 

So, if you look only at the recent history of interest rates, this may seem like a large jump. However, when you take a longer view and look at historical interest rate trends, we are still far below historical averages. Even news outlets use adjectives like “aggressive” and compare the current rate to the “most recent high in summer 2019.”

When you zoom out, looking beyond this recent time of uncharacteristically low interest rates, you’ll see that even with these increases, interest rates are still at historic lows. Over the past 60 years, the average federal funds rate has been just above 4.6%. From 1977-1991 the rate didn’t drop below that average and soared as high as 20.6% in 1981. We have had below-average interest rates since 2008. And even with the most recent increase, we’re still below historical averages.

Despite the historical data, the market reacted negatively over the last week to the news that the Fed is continuing to be more hawkish on inflation, with expectations of multiple interest rate increases in the next 12 months. 

Why this is somewhat of a surprise is confounding, as an important chart should be referenced:

Is the Fed “tight”? Hardly. Historically the Fed funds rate has been over inflation, and in some cases, for years. Unless supply chains heal quickly or we see a significant recession, in my opinion, we are a long way away from pausing rate hikes if we actually want to be serious about slowing inflation.

Low interest rates are fresh in people’s minds. It’s easy to focus just on that most recent data, especially when low rates have persisted for so long. When I remind my kids of a larger vacation we took a year ago (like Florida), suddenly the weekend we just spent up north is no longer “the best vacation ever.” It just takes a little reminder to put recent events into perspective. Hopefully, being reminded of longer-term trends, and adding more data points to the interest rate conversation, will widen people’s views and help eliminate some of that recency bias.

Note: The opinions expressed are the author’s views but may not reflect those held by other advisors at Walkner Condon Financial Advisors. 


Alicia Vande Ven, M.S.

Alicia Vande Ven, M.S.

Financial Advisor

Alicia Vande Ven is a Candidate for CFP® Certification at Walkner Condon Financial Advisors, a fee-only, fiduciary financial advisor firm based in Madison, WI, that works with clients locally and around the country.


ABLE Accounts in Wisconsin: Key Things to Know for WI Residents

ABLE Accounts in Wisconsin: Key Things to Know for WI Residents

There are many types of accounts for individuals to employ as part of their saving and investment plan – IRAs, HSAs, FSAs, 529 plans, and more. However, there is one account that we haven’t covered before and doesn’t get a lot of attention when considering the alphabet soup of account types – an ABLE account. And while ABLE accounts can be a bit more complex for Wisconsin residents, they offer significant tax benefits for individuals with disabilities and their families. In this piece, we’ll cover the basics of ABLE accounts, as well as what Wisconsin residents specifically should know when considering opening an ABLE account.

What is an ABLE account?

The ABLE acronym stands for Achieving a Better Life Experience. It became law on Dec. 19, 2014. An ABLE account is a tax-advantaged savings account that allows individuals with a disability and their families to save and invest money without losing certain government benefits (i.e. SSI, SSDI, Medicaid). The money in the account grows tax-deferred and income from the account is tax-free when used for qualified expenses.

What are considered qualified expenses for ABLE accounts?

A qualified disability expense is a broad definition that includes things like housing, food, transportation, education, assistive technology, personal support services, healthcare expenses, and financial and administrative services.

Who is eligible for an ABLE account?

Individuals who became blind or disabled before the age of 26 are eligible for an ABLE account. 

How much can I contribute to an ABLE account?

The ABLE account contribution amount is capped at $16,000 for 2022. That amount is per beneficiary, not per person (a difference from 529 college savings accounts). For example, each parent and grandparent could contribute $16k to a child’s 529 account. However, for an ABLE account, the TOTAL contribution from all sources (excluding wages earned by the beneficiary) is capped at $16k.

Are ABLE accounts available to Wisconsin residents?

Wisconsin does not have an ABLE program, but Wisconsin residents can establish an ABLE account in another state if that state’s program is open to out-of-state residents. Currently, 28 states offer ABLE accounts open to out-of-state residents. 

How do I decide which state I open my ABLE account in?

There are many differences and distinguishing features for each state’s ABLE account, including: 

  • Annual fees (ranging from $0-45)
  • Debit card options (not all programs offer a debit card and some charge a monthly fee)
  • Investment options (fund choices range from as few as 4 up to one state that offers 15, but a majority offer 6 different investment options from a variety of financial institutions including Vanguard, Fidelity, BlackRock, Schwab, and others)
  • Investment fees (underlying expense ratios for investment funds range from .34%-.94%)
  • Account maximums ($234,000-$550,000)
  • Account administration (the bank and/or investment company that holds the underlying accounts)

Best state for maximizing account balance

The “best” program is somewhat based on what is most important to the account holder and how the beneficiary will use the account. Virginia is arguably the best state for maximizing an ABLE account balance. 

  • Annual Fee: $39 (eStatements)
  • Debit Card: Yes, no monthly fee (PNC Bank)
  • Investment Options: 4
    1. Vanguard Aggressive Growth Fund
    2. Vanguard Moderate Growth Fund
    3. Vanguard Conservative Income Fund
    4. Fidelity Money Market
  • Total Expense Ratio: .36%-.39%
  • Account Maximum: $550,000

Best All-Around ABLE Account

When it comes to the plan itself, most National Able Alliance (NAA) Member Plans are the best available option. The breakdown of the basics of those plans is below. 

  • Annual Fee: $45 (eStatements)
  • Debit Card: Yes, no monthly fee (Fifth Third Bank)
  • Investment Options: 6 (Mutual funds within each option include a mix of Vanguard, BlackRock, and Schwab funds)
    1. Aggressive Growth Fund
    2. Moderately Aggressive Fund
    3. Growth Fund
    4. Moderate Fund
    5. Moderately Conservative Fund
    6. Conservative Fund
    7. Checking (Fifth Third Bank)
  • Total Expense Ratio: .34%-.37%
  • Account Maximum: $305,000-$511,758 (depending on state)
  • Includes: Alaska, Arkansas, Colorado, DC, Delaware, Illinois, Indiana, Iowa, Kansas, Michigan, Nevada, New Jersey, North Carolina, Pennsylvania, and Rhode Island (other states are members of the NAA, but have a monthly fee associated with their debit card option)

Can I still get a Wisconsin state tax deduction if I contribute to another state’s ABLE plan?

Yes! As of 2021, there is a subtraction on your Wisconsin income up to the annual gift exclusion limit ($15,000 in 2021, $16,000 in 2022) for the account owner. This subtraction is for money deposited directly into an ABLE account and does not include rollovers or transfers.

How We Can Help

Part of our role as fiduciary financial advisors is to help our clients navigate through investment options and select what is right for them. We have an experienced team of advisors that is here to help you. You can schedule a no-cost, no-obligation appointment with our team here


Specific account details are subject to change and we are relying on the information from outside sites, which may or may not have completely correct information. You should consult a financial professional and perform your own due diligence on these providers before you make any changes to your own investments. We are not affiliated with the National ABLE Alliance or any of the different state’s ABLE plans.


Alicia Vande Ven, M.S.

Alicia Vande Ven, M.S.

candidate for cfp® certification

Alicia Vande Ven is a Candidate for CFP® Certification at Walkner Condon Financial Advisors, a fee-only, fiduciary financial advisor firm based in Madison, WI, that works with clients locally and around the country.

What to Know About an 83(b) Election for Restricted Stock

What to Know About an 83(b) Election for Restricted Stock

Employee stock grants can be an excellent benefit, but they can also be complicated, especially when they involve restrictions and vesting schedules. Stock grants also come with significant tax consequences that, depending on the situation, can leave you with large tax bills. However, you do have some control over when those tax bills are paid and, in the right circumstances, you can lower your total tax bill significantly if you elect to pay taxes upfront. That’s where the 83(b) election comes in.

When a company awards an employee restricted stock, the employee is taxed on the difference between what they paid for the stock and the fair market value of the stock. For example, if an employee is awarded stock worth $10 and the employee paid $8 for the stock, the employee is taxed on the difference of $2. Typically, the employee isn’t taxed on that $2 until they actually become vested in the stock. Until then, the stock is at substantial risk of forfeiture because if they leave the company for any reason, they won’t receive the stock.

Basics of an 83(b) election

With an 83(b) election, you are electing to pay taxes on the entire value of the stock on the date of grant instead of paying taxes as you become vested in the stock. You pay taxes based on the current value as opposed to whatever the value happens to be when you become vested. 

For example, you are awarded 10,000 shares of company stock that vest over 5 years. The current share price is $1. If you make the 83(b) election you will include $10,000 in your ordinary income the year you are granted the stock and you will be taxed at your marginal tax rate. This could be up to 40% which means $4,000 in taxes for those in the higher tax brackets. If you don’t make the 83(b) election, you will include in your ordinary income each year the portion that vests that year. The example below assumes 20% vesting each year and 40% tax withholding.

Stock Price Vested Value  Taxes Due 
Grant $1.00  $                    –    $                –   
Year 1 $1.50  $         3,000.00  $      1,200.00 
Year 2 $2.00  $         4,000.00  $      1,600.00 
Year 3 $2.50  $         5,000.00  $      2,000.00 
Year 4 $3.00  $         6,000.00  $      2,400.00 
Year 5 $3.50  $         7,000.00  $      2,800.00 


What are the benefits of making the 83(b) election?

In the example above, if you made the election, you would have paid $4,000 in taxes at the date of grant. If you didn’t make the election, you would end up paying $10,000 over 5 years. The more the stock price goes up, the more money you save on taxes by making the 83(b) election.

What are the risks of making the 83(b) election?

If you leave the company before you are fully vested in the stock, it’s possible you will have paid taxes on stock that you don’t ultimately receive. In the above example, if you left after 2 years you would have overpaid by $1,200; however, if you stayed at least through year 3 you would come out with tax savings.

If the stock price declines you would also end up overpaying on taxes. 

When would I want to make an 83(b) election?

    • You plan on staying at the company until your shares are fully vested; 
    • You have the cash to pay the taxes due within 30 days of your stock grant; 
    • You are confident that the value of the stock is going to go up;
    • Adding the vesting value to your income each year would; consistently make you ineligible for tax credits that you would otherwise be eligible for;
    • Your tax bracket will be the same or higher in future years.

When wouldn’t I want to make an 83(b) election?

    • You plan on leaving the company before the stock is fully vested;
    • You don’t have enough liquid assets or it would strain your finances to pay the taxes upfront;
    • You think the stock value will go down or stay the same; or
    • You will be in a lower tax bracket in the year(s) the shares vest.

What happens when I sell the stock?

You will pay the favorable capital gains tax rate (20% + 3.8% for high-income taxpayers) on any amount that exceeds your cost basis.

If you make the 83(b) election, the cost basis in our example would be $1 per share because that is the amount you included in your income. If you sold all your shares in year 5 after becoming fully vested you would have a capital gain of $25,000. ($35,000 sale price – $10,000 cost basis)

If you do not make the 83(b) election, the cost basis of your shares would vary based on the price of the stock as it vested. You would have a total capital gain of $10,000.

# of Shares Cost Basis Capital Gain
Year 1 2000 $         3,000.00  $      4,000.00 
Year 2 2000 $         4,000.00  $      3,000.00 
Year 3 2000 $         5,000.00  $      2,000.00 
Year 4 2000 $         6,000.00  $      1,000.00 
Year 5 2000 $         7,000.00  $                 –   

Your total taxes paid after the sale of all shares:

83(b) election No 83(b) election
Ordinary Income (40% tax rate) $         10,000  $           25,000 
Capital Gains (23.8% tax rate) $         25,000  $           10,000 
Total Taxes Paid $           9,950  $           12,380 

Bottom Line:

An 83(b) election can be an effective tool to potentially lower your overall tax liability on employee stock grants; however, there are many factors that go into determining if it’s the right choice for you. How a company sets up its stock plans and each employee’s situation can vastly impact these numbers and introduce other considerations that might make an 83(b) more or less appealing.  As financial professionals, it’s our job to help guide you through the options and determine the best course of action for you and your unique situation.


Alicia Vande Ven, M.S.

Alicia Vande Ven, M.S.

Candidate for CFP® Certification

Alicia Vande Ven is a Candidate for CFP® Certification at Walkner Condon Financial Advisors, a fee-only, fiduciary financial advisor firm based in Madison, WI, that works with clients locally and around the country.