STUDIO CITY (CBS) — Casey Mervine from Charles Schwab visited the KCAL 9 studios Friday to talk about a year-end financial checklist.
Year-End Financial Checklist
-It might be time to adjust your W-4. It may feel like a win to get a $400 refund from the government every April, but it just means that you’re overpaying to begin with. Withholding less from your paycheck will give you extra cash on payday. On the other hand, if you withhold too little, you could find yourself owing money at tax time. Take a good look at your W-4 and figure out if you should make any changes.
-Visit with a financial adviser and tax professional. To ensure you’re taking advantage of all tax benefits available and on the right path towards financial fitness, visit with a financial adviser and tax professional to review potential options.
End the year on a good note, now is a good time to deal with that overflowing pile of important documents. That doesn’t mean you can dump everything into the shredder, though. Keep for seven years: W-2s, 1099s, tax returns and receipts for anything you’ve deducted. Shred: all non-business-related receipts that you’ve stashed in your desk drawer, plus utility bills and monthly credit card statements.
-Maximize your retirement plan contributions. If you haven’t reached this year’s contribution limit for your retirement plan, kick the funding up a notch for the rest of the year and plan to maintain that contribution in 2012. The sooner you maximize your contributions, the more time your investments have to benefit from potential long-term growth.
-Charities need help year-round, not just at the holidays. Try to work a small donation into your monthly budget. On average, Americans give 3.2% of their income to charity. That may not seem like much, but it can feel like a lot when you factor in your expenses. Determine what you feel comfortable giving, and work it into your monthly budget for this coming year. If you can’t find a way to fit in a monetary donation, volunteer instead. Time really is money—and most charities need as much as they can get.
-Get smart with college savings plans. The IRS places limits on the number of adjustments allowed to 529 plans per year, so check with your advisor and consider a shift before the New Year. You can also reap potential tax benefits if you open or contribute to your kids’ or grandkids’ college savings plan of any sort before the year ends.
-Spend your flexible spending account. If you’ve covered the basics but still have some remaining funds, check your plan’s list of eligible expenses for last-minute ideas. Make sure you use the money that’s left in your account by the end of the year (or your employer’s deadline), or you’ll lose it. It’s also enrollment time for 2012 FSAs, so consider whether you’ve spent all your funds in the past and make any necessary adjustments.
For more information, visit Schwab online.