As the year winds down, so does the time that you have left to make up for any financial slacking that you’ve done throughout the year. Before December ends, take the following five steps to ensure a strong financial start for the new year.
- Cash in on energy efficiency. Have you been thinking about making an energy-efficiency home improvement this year? If you get it done before December 31, you may qualify for a tax credit. There are a number of appliances and upgrades including heating systems, air-conditioning systems, and windows that can get you money back.
- Get financial papers in order. You may not be thinking about paying taxes around New Year’s, but tax time will be here before you know it. If you’ve been stashing all of your receipts and other paperwork in a folder, now is the time to start getting them organized, particularly the ones that are related to deductions.
- Maximize flexible spending accounts (FSA). Many employees have FSA programs that allow employees to set aside tax-free money for specific out-of-pocket health care and childcare expenses. Typically this money does not roll over to the next calendar year. If you haven’t already signed up for an FSA, Investigate on whether this makes sense for you. If you are currently enrolled, check your balance before December 31 so you can use any remaining funds.
- Make final charitable contributions. One way to decrease the amount that you owe on your taxes is to make charitable donations. If you aren’t in a position to donate cash, consider donating items. Whenever you donate items or cash, make sure that you get a dated receipt.
- Start planning for the future. Check on your 401(k). Is it high enough that you will receive the full benefit of your employer’s match? Do your investments make sense for your age and the period of time that you have left before retirement? You should ask yourself these questions a minimum of once a year to ensure that your retirement account is on track to keep you covered financially when you retire from your current full-time job.