Anyway, now is the time to start making some end of the year plans, especially when it comes to your finances. What you do over the next two months can have a big impact on your taxes, as well as other parts of your financial life. Here are some simple things that you should check now, so that you can make sure you’re prepared for the end of 2012.
Check Your Investing Accounts
A lot of your investments will require attention over the next two months, especially when it comes to specialty acocunts.
First, if you’re still saving money for the future, see if you can hit the max for your retirement accounts:
- Maximum 401k Contribution: $17,000
- Maximum IRA Contribution: $5,000
Plus, if you’re over 50, you can have additional catch-up contributions:
- 401k Catch-Up Contribution: $5,500
- IRA Catch-Up Contribution: $1,000
Finally, if you have a 401k or Traditional IRA and are turning 70 1/2 this year, you will need to take your required minimum distribution (RMD). Remember, if you don’t take this distribution, the amount you were supposed to take will be taxed at a staggering 50%!
Flexible Spending Accounts
With just a few months left until the end of the year, have you used all your tax free money yet? Remember, if you don’t spend what’s in your flexible spending account (FSA), you lose it. So, if you haven’t checked your balance lately, make sure you check it out and see if you have any money left to spend.
Also, make sure that you understand the basic changes that are occurring to the FSA in 2013. Starting on January 1, 2013, the limit that you can contribute to your FSA drops by 50% to $2,500. So, if you were planning on doing something in January versus December, and still have money left this year, you may want to look at your schedule.
Finally, if you’ve been putting off cleaning out your closet or getting ready for fall, now is a great time. You need to make sure that you get all your donations to charity in before the end of the year so that you can have a tax write-off this year, instead of next year. With all the rules and deductions that could change with the Presidential Election, nothing is really certain for 2013, so you may as well take advantage of it right now.
What other tasks do you need to do financially before the end of the year?