Year End Planning

by Tom Tousignant

in Blog, Financial Safety, Refinancing, Tax Tips, Wealth Building

So, did you get everything done that you had on your list at the beginning of the year?  Hopefully “Yes” for vacations and other fun stuff, and hopefully “Yes” for important stuff, like checking your life insurance needs or refinancing your mortgage.  Most likely, if you reviewed a list of what you wanted to do over the past year there are a few (boring) things you never got around to…Finishing your to-Do list

With just a month left in the year, there is still time to get a few key things done, and some things you really need to look at before the end of the year to save money on your income taxes.

Here are three big areas that really need to be looked at each year:

  1. Insurance: Life, Homeowners and Liability.  Homeowner’s policies change each year – it’s really important to make sure you aren’t paying too much, or worse, paying too little and not having the coverage you need.
  2. Income Taxes:  You can save a ton on taxes by deferring income until next year, and paying deductible expenses this year.  If you have anything complex with your taxes, such as owning a business, rental property,  moving, or job changes, it’s a great idea to consult with a CPA or Tax Adviser before the year ends to best prepare yourself for your 2012 tax returns.
  3. Savings Goals: If you have a 401k at work, you have to make all your contributions before the end of the year.  If you let the year end pass, you will never get that opportunity again to defer the taxes on your savings.  For those of you lucky enough to be over 50, you can make even larger ‘catch-up’ contributions as well before year end.

Here is the number one reason why these 3 things are on most people’s lists still:

  1. You need a reliable, professional adviser to do these things correctly.
It takes time to find a trustworthy adviser, contact them, schedule an appointment, learn, plan and implement these things.  But, the effort and time involved is critical to succeed financially.
Here is the good news – this time of year is a great time to get these things done – not only do you have deadlines on some of these areas, but, many CPA’s, Insurance Pro’s, and Financial Advisers have some extra free time in December because a lot of their normal business activities  are on hold with the holidays.
If you don’t know a great professional to help you in one of these areas, contact me, and I can make an introduction for you.  On the other hand, if you know someone that you rate as a ‘9’ or a ’10’ on a scale from 1-10, please consider introducing me as I am always looking to meet all-stars to help our clients out!

The B List:

There are a few more important things that need to get done prior to year end by some people – if these apply to you, don’t miss the chance or lose the money!
  1. Spend the money in your FSA – Flexible Savings account – if there is any.  Stock up on contact lenses, pre-pay January childcare or review the plan to see what you can do with any funds still there.
  2. Look at your beneficiaries – if your family changed this year.  Life Insurance, Retirement plans and some other accounts need you to keep your beneficiaries current.  Check this sooner rather than later if your family changed this year.
  3. Required minimum distributions – if you or your parents are over 70 1/2 this year, there are penalties for not withdrawing money from some retirement accounts (Roth’s not included).
  4. Income Tax Adjustments:  Visit to see if you are withholding too little or too much and then make the W-4 change with your employer before the end of the year so that next year is on track.
  5. Give something!  “It’s better to give than to receive” – and the tax man says it’s better to give prior to year end in order to receive a bigger tax deduction this year.  Charitable donations have to be made in the calendar year to be counted on your tax return.


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