Are you financially ready for the new year?
It is hard to believe that in just nine days we will be gathering around with family, watching football and getting ready for the annual feast.
Before you carve that turkey and sneak off for the mandatory over-satiated slumber, think about the following end of year house cleaning items before the time to do so passes by:
• Start gathering all of your tax documents now so that you are not running around last minute to make your 2017 tax filing. Once you receive all of your W-2s or 1099s, it will be breeze to complete.
• Speaking of taxes, have you maxed out your contributions to group and individual IRA accounts? Have you spoken to your accountant about possible benefits of converting to a ROTH? Have you taken your Required Minimum Distributions? Would it benefit you to harvest any potential tax loss against income?
• Consider if you should adjust your tax withholding for next year. My advice is to get as close to a zero tax refund as possible. Why should you give Uncle Sam an interest-free loan?
• Set your Christmas budget and stick to it, so that you don’t regret the bill come January. Christmas is a great time to gift the 529 college accounts in your family.
• It is open enrollment for Covered California. This is for anyone not in a group plan and not yet in Medicare. Enrollment began Nov. 1 and runs until Jan. 31, 2018. Go to www.coveredca.com to check out plans. The annual enrollment period for Medicare ends on Dec. 7.
• If you have a Flexible Spending Account (FSA), make sure you spend those funds on qualified expenses. Most FSAs require you to deplete the funds at the end of every year. It is a use it or lose proposition!
• Do you need to make any changes to the family trust, wills or durable power of attorney documents? Perhaps you should have a beneficiary review?
• Business managers and owners should consider talking to your accountant about deferring income and accelerating expenses. Set up your budget for next year. What is your marketing plan? Have you assessed the strengths, weaknesses, opportunities and threats (SWOT analysis) to your business?
Sound advice for all is to meet with your team of professionals — legal, tax, health and financial — before the end of the year. Planning for what is ahead will help you be more prepared for the bumps in the road and finish the year with confidence. Until we talk again, be well!