Tackling Your Financial To-Do List as 2015 Comes to a Close
It’s December 1 already and most of us are wondering where the year went. Many of us are also thinking about the to-do lists we started but never finished. To help you end 2015 with a sense of accomplishment, here’s a list of some year-end financial to-do’s to check off your list.
- Max out your retirement contributions
Make sure you’re on target for your retirement contribution, which will also help you save on your taxes. I’m sure you hear this every year but it’s worth repeating: contribute the maximum to your tax-advantaged retirement accounts, whether you have an IRA, a 401(k) or both. For 2015, you can contribute $5,500 to a traditional IRA, plus a $1,000 catch-up contribution if you’re 50 or older. Also consider contributing enough to your 401(k) to capture any company match. If you can do more, you can contribute up to $18,000, plus a $6,000 catch up for 50-plusers.
- Take advantage of your Health Savings Account (HAS)
Now is the time to max out your HSA if it’s tied to your high-deductible health insurance plan. An HSA lets you make tax-deductible contributions that you can later withdraw tax-free for qualified medical expenses. HSA contribution limits for 2015 are $3,350 for singles, $6,650 for a family, with a $1,000 catch-up for age 55 and up. And, if you’re lucky enough not to need the money, you can save it for future use.
- Prepay where possible
If you can do it try prepaying your property taxes, medical bills or estimated state taxes. This will give you added deductions to further reduce your taxable income.
- Use the money in your Flexible Savings Account (FSA) or you will lose it
Unlike an HSA, with an FSA you usually have to use the money you put into it during the calendar year or lose it. While new rules allow an employer to let you carry over $500 or give you an extra two and a half months to use the funds, it’s not required. Either way, now’s the time to check the balance in your FSA and put those funds to work.
- Take your required minimum distribution (RMD)
You must take your RMDs from your traditional IRAs and 401(k)s by December 31 to avoid a penalty. The only exception is your first RMD, which you can delay until April 1 of the year following the year you turn 70½. Miss the deadline and the penalty is 50% of the amount that should have been withdrawn.
- Give your health insurance a checkup
Make sure you have the most complete and cost-effective coverage available. Open enrollment for 2016 coverage on the Health Insurance Marketplace is from November 1, 2015 to January 31, 2016, so now’s the time to do some comparison-shopping.
- Charitable giving
Giving to a charity not only feels good, but has tax advantages. If you are unsure about what charities you want to donate to, visit charitynavigator.org which provides you with lists of non-profit organizations by category with information on each organization and how effective they are at using their funds.
Check these to-dos off your list and you’ll have a nice feeling of accomplishment for 2015. So, what are you waiting for, there’s no time like the present!