5 end-of-the-year financial tips you don’t want to miss
1. Check your credit score.
This is the perfect time to check your credit score to know what financial challenges you must tackle in the new year: pay off that holiday debt, establish better payment habits to improve your score, clean up any reporting mistakes or cancel dormant cards. You are entitled to one free credit report per year from the three major credit bureaus. Go to annualcreditreport.com, which has been established by the Federal Trade Commission to assist consumers in accessing their free credit report.
2. Make last-minute charitable contributions.
If you donate money before the end of the year, you can deduct it from your 2012 taxes. Your donation must be made to an IRS-recognized 501c(3) organization in order to qualify for the deduction. (See your tax advisor.)
3. Evaluate retirement planning.
Consider increasing your final 401k contribution.
If you haven’t already contributed the maximum of $17,000 (an additional $5,500 for those 50 and older) to your 401k, consider increasing your contribution amount from your final paycheck. You have until December 31st to make your final contribution for the year. For more information on 401k’s, click here.
Make Your IRA contributions.
You can make IRA contributions through April 15th, but why not consider doing it now so you don’t forget? For 2012, the IRA contribution limit is $5,000, or and extra $1,000 if you reach age 50 before the end of the year. See which type of IRA (traditional, Roth, SEP or CESA) is right for you.
4. Spend the balance of your Flexible Spending Account (FSA).
Be sure to use up any balances before the end of the calendar year or they will be forfeited. One way to do this is by stocking up on contact solution, first aid kits, thermometers, band aids and other eligible items.
If you participate in an FSA for either health or dependent care, check to see if the plan has implemented the new 2½-month extension provision, which allows 2012 FSA money to be used for expenditures through March 31, 2013.
5. Make an extra mortgage payment if you can.
Making that one extra payment will, over time, cut the amount of interest you’re paying on your mortgage and actually reduce the number of years you’ll need to make payments before your house is paid off.
Have a question about these tips?
For more information, contact John Kuhn.
PRIMEVEST® Financial Services, Inc. is an independent, registered broker-dealer. Member SIPC/NASD. Securities and insurance products offered by PRIMEVEST: Not FDIC Insured | May go down in value | Not financial institution guaranteed
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