As 2017 winds to a close, it’s a great time to think about ways to minimize taxes, save more, and take care of your finances. Here are some quick year-end money tips for wrapping up 2017 on the right financial foot!
Contribute To A 529 College Savings Plan
Now is the perfect time to open a 529 college savings plan or contribute to the one you already have. As Forbes discusses, make sure your contribution is received by December 31st (not just postmarked by that date) to take advantage of related tax credits or state tax deductions for contributing.
Make Charitable Contributions
The end of the year is always a popular time for charitable giving. If you itemize, donate by December 31st to take advantage of the tax deduction you receive for donating to a charitable cause. You can typically donate via check, cash, Paypal, or credit card. But you may not know that if you have securities like stocks, for example, that you’ve held for more than a year that have gone up in value, you can transfer them to your favorite charity and receive a tax deduction for the full market value. When you do this, you also avoid paying the capital gains tax on that investment!
Offset Capital Gains
Do you have investments in taxable brokerage accounts that have gone up in value that you want to sell? You may be able to reduce your capital gains tax on those investments by selling some investment losers. Look at investments that have gone down in value that you may be willing to sell. You can offset gains with losses to lower your tax hit. Work with a financial professional who can look at your portfolio and make suggestions on the best ways to minimize your capital gains taxes.
Examine Your Debt Load
Are you adding or reducing debt? The end of the year is a great time to take a look at your finances and see how you’re doing paying down debt, especially high-interest credit card debt. One of the best ways to get your finances in order is to pay down debt. The more debt you retire or refinance, the more money you’ll have in your pocket at the end of every month.
Review Your Retirement Contributions
Do you contribute to a 401K, 403B, IRA, or any other kind of retirement account? Are you maxing out your potential contributions? This is a good time to review your income, your savings, your probable expenses for next year, and think about whether you can put more money away for retirement. Can you spend a little less eating out or on other unnecessary expenses to put yourself in a better financial position? Many credit card companies offer the ability for credit card holders to break out their spending by category. Examine where you’re spending money and look for opportunities to cut costs and put more away for retirement in 2018.
When it comes to managing your finances, be strategic. Understand your options. Do your research. Don’t hesitate to talk to a financial professional who can examine your portfolio, take into account your unique challenges and opportunities, and explain potential next steps you should take to improve your financial situation.