Money Monday: Year-End Financial Checklist

Happy Money Monday! The year is almost over but there is still time to do some financial moves that will save you money when 2015 tax time comes around.

Over at US News, they have a financial end of the year checklist. Here are a few of our favorites:

2. Donate to charity. Dec. 31 is the deadline for charitable contributions you plan to deduct from your 2014 tax return. Instead of donating cash, some people donate appreciated securities such as low-basis stocks or mutual funds to avoid capital gains tax. “If we transfer that security, there’s no tax to the client, and when the charitable organization sells it, there’s no tax to them,” explains Tim McGrath, a certified financial planner and managing partner at Riverpoint Wealth Management in Chicago. Not sure yet where you want your charitable contributions to go? If you set up a donor-advised fund, you could gift money to the DAF and get a tax deduction this year, but actually distribute funds to charity in the future, McGrath adds. (No, you don’t get another deduction when you donate that money in the future.)

3. Max out retirement contributions. You have until you file your tax return next spring to make a 2014 contribution to an individual retirement account (IRA), but 401(k) contributions are only deductible when made in the same calendar year. If you want to establish a retirement plan for 2014, the plan documents also must be signed and put into place in 2014, according to Nadler. The 2014 contribution limit is $17,500 for 401(k)s and $5,500 for IRAs (with an extra $1,000 catch-up contribution option for those ages 50 and older).

4. Use up FSA money. If you still have money set aside in a flexible spending account for health care expenses, see if you can order new glasses or schedule that dental work you’ve been putting off. Some companies offer a grace period into the spring or a $500 FSA carry-over from one year to the next, but Nadler says she doesn’t see this often. If your employer doesn’t offer these provisions, then you’ll lose any unused funds once we ring in the new year.

5. Make 529 plan contributions. Money saved in a 529 plan grows tax-free when used for eligible educational expenses, and some states have additional tax benefits for residents who contribute to a plan in that state. McGrath reminds parents or grandparents to make 529 contributions, especially if they can reap a state tax break.

6. Adjust your tax withholding. If you’ve gotten married, divorced or had kids in 2014, then you probably need to update your withholding with your employer’s human resources department. “A lot of times they need to adjust their W4,” McGrath says. “I would rather they have that money where they control it [than get a large tax refund].”


Read the whole article here: end of the year checklist.