Year-end financial tips, continued

Last week, I outlined some financial planning tips that varied somewhat from year-end advice in past years, due to likely changes in the tax code going forward. They included things like accelerating and bunching itemized deductions, using highly appreciated securities for charitable contributions, paying state and local taxes as soon as possible but holding off prepaying mortgages, and selling winners in taxable accounts.

This week’s tips are more in line with what you have likely done in the past, but they are still important. The sooner you get going, the better.

USE YOUR GIFT TAX EXCLUSION You can give up to $14,000 to as many people as you wish in 2016, free of gift or estate tax. If you combine gifts with a spouse, you can give up to $28,000 per beneficiary, per year.

FULLY FUND YOUR COLLEGE SAVINGS 529 PLAN Money saved in these programs grows tax-free, and withdrawals used to pay for college sidestep taxes, too. You can invest up to $14,000 in 2016 without incurring a federal gift tax, and many states offer state tax deductions for the contributions.

PAY SOMEONE’S EDUCATION OR MEDICAL BILLS You can make unlimited payments directly to medical providers or educational institutions on behalf of others without incurring a taxable gift or dipping into your lifetime gift-tax exemption.

FULLY FUND EMPLOYER-SPONSORED RETIREMENT PLAN CONTRIBUTIONS The deadline for funding 401(k), 403(b) and 457 plans is Dec. 31. If you are not maxed out yet, you may be able to bump up your contribution limit on your last couple of paychecks. The limit is $18,000, plus an additional $6,000, if you are older than 50.

Consider converting a Traditional IRA into a Roth IRA. A conversion requires that you pay the tax due on your retirement assets now instead of in the future. Whether a conversion makes sense for you depends on a number of factors, the most important of which is whether you can pay the tax due with non-retirement funds.

TAKE REQUIRED MINIMUM DISTRIBUTIONS (RMDs) Uncle Sam requires that you withdraw money from retirement accounts after you turn 70 1⁄2. (IRS rules are complicated, so please consult IRS.gov for more specifics.) RMD withdrawals must occur by Dec. 31, and failure to do so results in a whopping 50 percent penalty on the amount you should have withdrawn. If you have multiple individual retirement accounts, you only need to take one RMD from all, based on your age and the total value of the accounts. But, if you also have a 401(k) or 403(b), you need to take the RMD from each account individually.

CONSIDER A QUALIFIED CHARITABLE DISTRIBUTION (QCD) Last year, Congress finally made QCDs a permanent part of the tax code. This technique allows you to sidestep the taxation on your RMD by making a gift of up to $100,000 directly from your IRA to a charity without having to include the distribution in your taxable income. If you use it, you swap having to claim the income for making a charitable deduction.

OPEN A SMALL BUSINESS RETIREMENT ACCOUNT If you open a qualified retirement account by Dec. 31, you have until the day you file your taxes next year, including extensions, to make this year’s contribution. One plan to consider is the solo or one-participant 401(k) plan, which allows total contributions, not counting catch-up contributions for those age 50 and older, of up to $53,000 for 2016.

Jill Schlesinger, a certified financial planner, is a CBS News business analyst. She welcomes emailed comments and questions.