As 2017 rapidly approaches, now is the time to evaluate everything in your life, including your finances. Spend some time looking over how to improve your finances heading into the new year. Here are some tips to help you as you analyze your finances.
Look At Your Deductions
If your total deductions for the entire year exceed the standard amounts, you should look at raising your deductible expenses. If you have any medical or property tax bills, pay those ahead of schedule.
Think About Retirement
If you have an employer sponsored savings plan, increase your contributions to the highest amount before the end of the year. You should at least try saving the maximum total that your employer offers in its matching program. This step can provide an opportunity to save extra money. The money that is taken from your gross pay and put into these accounts helps lower your taxable income. Not only will you increase your retirement savings, you’ll also reduce your tax liability. If you do not have an employer sponsored plan, you can use this approach for an IRA. If you start funding your account quickly, it can have a higher potential to be tax deferred. This will help grow your retirement savings.
Think about donating to your favorite charity to help maximize your taxable deductions. This will give you a nice tax benefit. If you are donating to gain a tax deduction, make sure the organization qualifies as a charity according to the IRS.
Look At Your Mortgage
Many homeowners are unaware of the fact that you can maximize the deductions on your future return. Most mortgages are paid off at the end of the payment cycle. A January statement will look at interest for December, and therefore be eligible for a tax break in the new year. For the new year, have your January payment arrive to your mortgage lender before the end of the year. This will help you receive a large mortgage interest deduction on your tax return, reducing your overall bill.
Get Help When Necessary
Do not be afraid to get help when you need it. Many people are starting to evaluate their financial situations, so this is a great time to talk with your legal and financial advisers to help you come up with a plan for your finances as you head into the new year.
Update Any Beneficiary Forms
The beneficiary is the person who received your money or benefits after your death. This is something that you should revisit, especially if you have been married, divorced, or had children in recent years. It is important that you change alignments if a major life event happened during the year.
Think About Your Retirement
With each passing year, retirement planning becomes more important. You must develop a plan for retirement and continue to monitor it. Think about how to secure guaranteed income, social security, and what type of pension options are available. Be sure to learn about the different tax scenarios according to your retirement plan.