It's the week to get personal finances in order
As the calendar ticks toward Dec. 31, here are some last-minute, year-end tips recommended by financial professionals:
• Do your donations: If you want a charitable deduction on this year's taxes, you need to write that donation check by Dec. 31. Donations made on a credit card by Dec. 31 are deductible for 2012, even if you pay the Visa bill in 2013, the Internal Revenue Service says. A gift by check also counts for 2012, as long it's mailed in December. Gifts to individuals are not deductible.
• Max out the 401(k): It's a gift to yourself — a little more retirement cushion. If you haven't maxed out the annual contribution to your 401(k) at work, do so now. For 2012, the annual contribution limit is $17,000; next year, the annual limit goes up to $17,500. If you're over age 50, you can make an additional catch-up contribution this year of $5,500.
• Ditto for your IRA: To boost your retirement savings, don't forget your IRA contributions. In 2012, the maximum contribution to IRAs and Roth IRAs is the smaller of $5,000 or your taxable compensation for the year. For those age 50 or older, the limit is $6,000.
If you're not covered by a retirement plan at work, you can get a full tax deduction for IRA contributions. If covered by an employer's retirement plan, you can take a deduction up to certain income limits (i.e. no deduction is allowed for married couples filing jointly with incomes above $112,000).
• “Moving” donations: If you're donating a car, boat or plane to a charitable organization at year-end, the IRS reminds that you can only deduct the fair market amount when the car is sold by the charity. This applies to vehicle deductions valued at $500 or more.
• Spend those FSA dollars: If you have a Flexible Spending Account at work to cover health/dependent care costs, now's the time to make sure you've spent all those tax-free dollars you squirreled away. Since FSA accounts are use-it-or-lose-it, you don't want to let that money slip away.
And once you've spent those dollars, you'll still need to file claims through your employer's health plan to get reimbursed.
For dependent care (such as child care or adult day care), the deadline to incur expenses is Dec. 31. For health care expenses, many employers offer a grace period through the first part of 2013.
Check with your employer's health care plan for deadlines on incurring expenses and filing claims.
And note: Not everything you buy is reimbursable as a health care expense. For instance, all over-the-counter medicines, including painkillers, require a doctor's prescription. For a detailed list, go to IRS.gov or your health care provider's website.
• Prepare the paper: Now's a good time to start gathering the paperwork for filing your 2012 taxes. Even if it's simply tossing the paperwork into a shoebox, start collecting proof of income (pay stubs, 1099s, W-2s) and proof of deductions/donations (charitable receipts, canceled checks, credit card statements, payroll deductions).
Whether you use a professional tax preparer or do your taxes yourself, getting organized now can save some headaches down the road.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- PUC approves Columbia Gas pipeline extensions program for homeowners
- Education Management removes itself from Nasdaq listing
- Highmark seeks double-digit increase for more benefits, heavy use
- FedEx investing another $1.2B in growth projects at FedEx Ground in Moon
- World’s 1st carbon capture power plant switches on in Canada
- EQT Corp. boosts profits despite lower gas prices
- Mortgage rate slide’s impact could be minimal
- Rule to close coal royalty loophole
- Amid struggles, top fiscal executive to leave EDMC
- Toy sellers to enhance marketing as holidays approach
- Falling fuel prices help airlines — not fliers