If you’re shopping for a house, or even just considering buying one, there’s one person that you absolutely need on your side: a Realtor. Potential buyers often think they can go it,
Year End Tax Planning
1. Review your estate plan and beneficiary designations.
Regardless of your age or how much you have in your bank account, it’s important to create and regularly review your estate plan with your legal advisors. Your estate plan dictates what will happen to your possessions, finances and dependents after you pass away. Things may have changed over the past year, and you should ensure your plan reflects your current lifestyle and family situation. “When reviewing your estate plan, you want to review who is included and whether the plan reflects recent life changes,” Kelly explained. “If you have children, it’s important to designate who will care for them if you aren’t around.” Your estate plan may also include things like standby guardianship and power holders (for example, financial and medical power of attorney). You should review these considerations with your legal advisors
2. Check your tax withholding.
Even though you won’t file your taxes until next year, if you wait until then to make adjustments, it’ll be too late to impact your 2018 taxes. Be sure to direct any tax questions to a tax advisor. “One of the country’s most comprehensive tax reform packages went into effect at the beginning of this year,” Kelly said. “You want to make sure that you’re aware of your tax obligations and current withholdings before Dec. 31, so you don’t have any surprises come filing season.” The IRS offers an online withholding calculator.
3. Tap into unused benefits.
Many employers’ health insurance plans include benefits such as flex spending accounts (FSAs) or health savings accounts (HSAs). If your employer offers an FSA, you may need to spend that money before the end of the year – or lose it forever. Qualifying households can allocate up to $5,000 per year for dependent-care services and $2,650 per year for medical expenses. If you have an HSA, you have until year-end to max out your contributions: $6,900 per year for those under 55 per household, and $7,900 per year for Americans 55 and older per household.
4. Check your credit report.
Everyone gets one free credit report every 12 months from each of the three major credit bureaus at www.annualcreditreport.com. Consider checking one report every four months to help you catch any fraud sooner rather than later. “Take advantage of your free credit report so you’re aware of your financial status and also to make sure nothing unusual or fraudulent occurred over the past 12 months,” Kelly said. “Once you get your free credit report, I recommend saving it and keeping a hard copy. You never know when you’re going to need it.” If you notice any suspicious activity, contact the reporting bureau.
5. Max out your 401(k) plan
Hopefully you’ve been contributing enough to your 401(k) plan to at least receive a company match if your employer offers one, but are you taking full advantage of the tax-advantaged retirement savings vehicle? Individuals under age 50 can max out their 401(k) plan by contributing $18,500 per year, and those age 50 and older can put an extra $6,000 into their 401(k) plan per year. “A 401(k) is a great tool to help save for retirement,” Kelly noted. “If you’re able to contribute more – or even better, max out your contributions – you have until the end of the year to do so.” Certainly the end of the year can be a busy time, but your future self will thank you for taking advantage of these year-end planning strategies!
Kelly also advised that if you’re 70 ½ or older you should make sure to take your required minimum distribution from your IRA before the end of the year.
Born on the north side of Chicago and raised in Colorado, Mel started his career in hospitality at a very young age. Working alongside his family in their Colorado Springs restaurant, Mel was not only....