Before you plan your New Year's Eve festivities, take some time for end of the year financial tasks. Tidying up money matters before the year's end will help you begin the New Year with a fiscal advantage!
We love making New Year's resolutions. But more important than resolutions that may or may not last past the first week of the New Year are the end-of-year tasks concerning your finances.
US News reminds us in "6 Financial Tasks You Need to Complete Before the End of the Year" that there are several opportunities for smart financial moves and some last chances to take advantage of financial benefits. The article lists six things to consider crossing off your 2015 list in the next few weeks:
Make a Charitable Donation. Your donation to a charity is tax deductible. Why not do this and take the deduction on your 2015 tax filings? Charitable donations are nice for homeowners who itemize because they get the full benefit of the deduction.
Make a Retirement Contribution. Max out your annual contributions to retirement accounts to make certain that their tax benefits help you in 2015—and so those contributions count against your 2015 contribution cap.
Draw Down any Remaining Cash in Your FSA. If you have a flexible spending account, you may want to spend that money before December 31 or lose it.
Make 529 Plan Contributions for Your Kids. Don't forget about your grandchildren or yourself. This strategy is a great way to save for college expenses, and it's a great gift too, with tax-free growth for college savings. The article points out that 529 plan contributions are not federally tax deductible but that many states offer state tax deductions or tax credits on that state's 529 plan.
Give Financial Gifts to Family Members. The federal government allows each person to make cash gifts up to $14,000 to another person without tax liability.
Look at Your Investments. Have you lost money on some investments to balance out financial gains? Did you sell anything this year that earned capital gains? If so, and you also own investments that will be sold at a loss, you may want to go ahead and take that loss now by selling those items.
Before you jump into planning your New Year's Eve party, take the time to address these six tasks. You'll feel better about those resolutions, whether you stick with them or not!
Reference: US News (December 1, 2015) "6 Financial Tasks You Need to Complete Before the End of the Year"