You are probably a lot like most people… December comes with a flurry of activities, colder weather, and deadlines. In other words – it may be the most wonderful time of the year, but it sure is BUSY!
That said, you may not have a lot of flexible time for year-end financial planning, but in some cases this may be the last chance you get to take advantage of some year-end opportunities and prepare for the New Year. Here are my five favorite tips for December:
1. Review health and dental care choices. Many employers allow you to make changes to your benefit plans now. Check with doctors and dentists to make sure they’re still in your plan’s preferred provider network and that your family has adequate coverage.
2. Review use-or-lose accounts. Pretax Flexible Spending Accounts (FSAs) are set up this way. Review your plan to see if you have some spending to do, or if your employer offers a grace period. Even then, make sure 2011 expenses are still allowed in 2012.
3. Review your withholding. Check the withholding calculator at the IRS website. If you haven’t been withholding enough to cover your taxes, you might want to increase the amount. Under-withholding can result in penalties.
4. Get ready for 2011 taxes. Check last year’s returns to see who needs to send you what tax documents, and by when. Make a list and follow-up if anyone holds you up at the beginning of the year. Also, check last year’s return for itemized deductions. See if you should make deductible contributions and/or purchases now or wait until 2012.
*Note: Be sure to consult with a tax professional before making any decisions related to your tax situation.
5. Set your 2012 financial goals. Now is the time to write down what you’d like to achieve financially next year. Save money for a down payment on a new house? Start a college fund for your kids? Put more into your retirement fund?
*Note: Be sure to consult with a financial planning professional before making any decisions related to investing.
I hope you find these tips to be helpful as you wind down your year and look forward to 2012!
