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January
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January Planning Idea No. 1: If you haven't already done so, set up
a basic filing system for storing your important documents and records.
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January Planning Idea No. 2: If you haven't already done so, prepare
a financial plan and a budgeting system for monitoring your income, expenses,
assets and liabilities. The information you collect will enable you to start
planning for retirement or other major life events. Use last year's
information to establish a budget for the coming year.
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| 31st |
Start getting ready
for preparing your tax return for the preceding year. As you receive
Forms W-2, 1099 and other tax documents, file them immediately. This will reduce time looking for them later.
Request a social security
number for any child regardless of age who does not already have one.
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February
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| February
Planning Idea No. 1: Establish or review your savings plan to begin
accumulating assets for your life goals. Professional guidance will
be helpful in reviewing investment alternatives. |
February
Planning Idea No. 2: Establish or review your retirement plan. Explore the availability of deferred compensation programs through your
employer, such as 401(k) and 403(b) plans. Begin contributing as soon
as you are eligible.
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| 5th |
Compare
January income and expenditures with your budget. Make adjustments
as appropriate to your February expenditures. Make sure you have invested
your planned savings amount for January. |
| 15th |
Verify
that you have received all necessary forms W-2 and 1099 and a statement
showing the year-end balance of IRA and Keogh plans. Contact the appropriate
company for any that have not been received. For those that have been
received, make certain that the amounts agree with your records. |
| 20th |
Gather
together all of your tax information. Although taxes for personal
returns are not due until April 15, it is best to get an early start since
additional follow-up may be necessary. |
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March
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March Planning Idea No. 1: If you have young children, review their
college planning. Determine the amount you will need to accumulate
by the time they enter college. Based on this estimate, establish
or review your savings plan. Consider one or more of the tax-favored
higher education programs.
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March Planning Idea No. 2: Review your home mortgage. Are you paying
too much interest? Consider the savings you could obtain by refinancing.
Also look into the possibility of making mortgage payments twice a month
or adding some principal to each payment to save on the interest cost. If
you have other debt at higher interest rates, and the interest is non-deductible,
consider paying off these debts with a home equity loan.
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| 1st |
If
you were age 70-1/2 last year, and did not take the required minimum distribution
from your retirement plans, prepare to take a withdrawal before April 1.
Professional guidance will be helpful here. |
| 5th |
Compare
February income and expenditures with your budget. Make adjustments as appropriate
to your March expenditures. Make sure you have invested your planned savings
amount for February. |
| 31st |
Total
up your taxable income, capital gains and deductions for the first quarter.
This information can be used to plan your estimated tax payments and perhaps
avoid or minimize any underpayment penalties. |
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April
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April
Planning Idea No. 1: Review your retirement plans. How much have
you accumulated so far? How much do you need to retire comfortably
at the desired date? Professional advice may be helpful in determining
how much you should be saving and what the best investment vehicles are.
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April
Planning Idea No. 2: Perform an inventory of your non-financial assets
(e.g., home, furniture, cars, personal belongings). Compare this inventory
to your property insurance coverage. Is your insurance adequate for
your assets? You may need a rider to your policy for certain items
such as jewelry. If some assets are no longer in use, consider selling
them or donating them to charity. You may be entitled to a deduction
based upon the fair market value of the assets.
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| 5th |
Compare
March income and expenditures with your budget. Make adjustments as
appropriate to your April expenditures. Make sure you have invested your
planned savings amount for March. |
| 10th |
Review
planned contributions for IRAs, SIMPLE Plans, SEPs and Keoghs for the preceding
tax year. Professional advice should be sought to help you determine
the maximum amounts deductible, and whether postponing return filing for
the preceding year will help determine the amount and timing of the contribution. |
| 30th |
Add
the estimated tax payments for the year to your calendar so you don't overlook
them later. You might want to attach the payment vouchers to your
calendar with a paperclip. |
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May
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May
Planning Idea No. 1: Order a copy of your credit report from one of
the major credit reporting agencies. Read the report carefully and
report any discrepancies to the appropriate agencies. This not only
ensures that the records are accurate, but helps prevent others from obtaining
credit in your name.
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May
Planning Idea No. 2: If your family status has changed recently—you
got married, had a child or became widowed or divorced—consider the
important new financial considerations that may now come into play. These
might include property ownership, providing for children's welfare, post-mortem
planning, payroll deductions and day-to-day finances.
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| 5th |
Compare
April income and expenditures with your budget. Make adjustments as
appropriate to your May expenditures. Make sure you have invested
your planned savings amount for April. |
| 10th |
Based
upon the results of your prior year's tax return, make any necessary adjustments
to your tax withholding by completing Form W-4 and providing it to your
Employer. |
| 31st |
Total
up your taxable income, capital gains and deductions through this date.
Your tax advisor can use this information to plan your estimated tax payments
and perhaps avoid or minimize any underpayment penalties. |
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June
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June
Planning Idea No. 1: Review your life, health, and disability insurance
policies. (You reviewed your "asset" policies in April.) Check with your employee benefits office as to what programs are available. Make certain you have adequate coverage. Consult with your financial
advisor as to the appropriate amounts for your age and income.
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| June
Planning Idea No. 2: Review your utility costs for the year. Make
certain you are getting the best possible deal where multiple providers
are available. For example, obtain competitive quotes for long distance
phone service. For other utilities, review your usage to see if any
savings are available. Consider the use of annual "budget"
plans with the utilities to even out annual payments.
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| 5th
| Compare
May income and expenditures with your budget. Make adjustments as
appropriate to your June expenditures. Make sure you have invested
your planned savings amount for May.
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July
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| July
Planning Idea No. 1: Give thought to your estate plan—to how you
intend your assets to be distributed at your death. Federal estate tax may
be a factor. According to the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act (TRA 2010), estate tax
will apply for 2010-2012 if net assets left to persons exceed $5,000,000. Estate tax rates valued over $5,000,000 will have a tax
of 35%. Professional guidance is suggested concerning ways of minimizing estate taxes and probate
costs, so that the maximum amount goes to your desired beneficiaries. |
| July
Planning Idea No. 2: Examine your property tax bills and explore the
possibility of challenging the valuation. |
| 5th |
Compare
June income and expenditures with your budget. Make adjustments as appropriate
to your July expenditures. Make sure you have invested your planned
savings amount for June. |
| 20th |
Review
your investment performance for the first half of the year. Consider reallocating
under-performing or low-yielding assets. |
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August
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August
Planning Idea No. 1: Review or prepare a "post-mortem" letter
to your spouse spelling out the location of your assets and property (assets
of a deceased are often lost because a spouse may not be aware of them or
know their location), the names of all your advisors, and any other information
your spouse should know to minimize his or her burden in the stressful period
after your death.
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| August
Planning Idea No. 2: Request a Personal Earnings and Benefit Estimate
Statement from the Social Security Administration. This can be done using
Form SSA-7004 or over the Internet. (Click
here to request statement). This statement summarizes your social security
earnings history and provides an estimate of the benefits to which you are
entitled. It is important to verify that you have been credited for all
of your earnings. You can also use this statement in your retirement planning. |
|
5th |
Compare
July income and expenditures with your budget. Make adjustments as appropriate
to your August expenditures. Make sure you have invested your planned savings
amount for July. |
|
31st |
Total
up your taxable income, capital gains and deductions through this date.
This information can be used to plan your estimated tax payments, and perhaps
avoid or minimize any underpayment penalties.
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September
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| September
Planning Idea No. 1: Update your will and the will of your spouse, if
you are married.
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September
Planning Idea No. 2: Discuss with your spouse your respective wishes
concerning health care and funeral arrangements. These are not pleasant
tasks, but it is important that others know your wishes should you be incapacitated.
Create a Living Will to document your decisions.
|
| 5th |
Compare August income and expenditures with your budget. Make adjustments
as appropriate to your September expenditures. Make sure you have invested
your planned savings amount for August. |
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October
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| October
Planning Idea No. 1: Review the asset allocation of your portfolio.
Increases and decreases in its value can upset the asset allocation that
you consider optimal. Should you shift some stock investments into or out
of bond investments? Should you shift some funds into tax-free investments? |
| October
Planning Idea No. 2: If your employer has a "Flexible Spending
Arrangement," determine the balance left in the plan.
Your plan may allow you to carry over a year-end balance for use early in the following year. If you may want
to incur discretionary medical, dental or optical costs prior to year-end
to use up any balance. If you do not participate in such a plan, find out
if one is available at your company. Also find out if you are eligible for
a "Health Savings Account." |
| 5th |
Compare September income and expenditures with your budget. Make adjustments
as appropriate to your October expenditures. Make sure you have invested
your planned savings amount for September. |
| 31st |
Total
up your taxable income, capital gains and deductions through this date.
Estimate the amounts expected through year-end. Determine where you stand,
and what steps, if any, you should take prior to year-end to minimize your
tax liability. Professional guidance will be helpful here.
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November
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| November
Planning Idea No. 1: If your estate planning indicates a potential estate tax liability, consider making gifts before year-end to minimize estate taxes. Example: You can give away $12,000 a year ($24,000 if you are married and your spouse elects to participate) to each
of a number of donees free of gift tax, thereby reducing your estate tax
liability. |
| November
Planning Idea No. 2: Check your frequent flier programs for mileage
expiring at year-end. If mileage sufficient for an award is going to expire,
request an award certificate. You usually have a year from the date of the
award to use it. Then, if the award year is about to expire, you can turn
it in for a free ticket. You then have still another year to use this ticket.
In this way, you usually can get almost a two-year "extension"
for mileage that would otherwise expire. |
| 5th |
Compare October income and expenditures with your budget. Make adjustments
as appropriate to your November expenditures. Make sure you have invested
your planned savings amount for October. |
| 10th |
Estimate
your taxes due for the year, and find out what steps you should take before
year end. |
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December
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December
Planning Idea No. 1: Consider making charitable contributions before
year-end both to obtain the maximum tax deduction and to fulfill any charitable
programs or commitments you may have established.
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December
Planning Idea No. 2: If you need a new car, now is the time to purchase
or lease. Frequently, dealers are anxious to clear out last year’s inventory
prior to year-end. In making your choice, consider the federal tax (and occasional state tax) advantages for buying fuel-efficient vehicles.
|
| 5th |
Compare
November income and expenditures with your budget. Make adjustments as appropriate
to your expenditures. Make sure you have invested your planned savings amount
for November. |
| 10th |
Examine
your current investments to determine those with unrealized losses. Consider
selling those investments to take the loss this year. You can deduct up
to $3,000 in capital losses in excess of capital gains. However, do not
let the tax savings outweigh the investment potential. You might consider
"swapping" for a similar company in the same industry if you like
the potential of the industry. |
| 20th |
Consider paying tax-deductible expenses prior to year-end. Some common examples are real estate taxes, quarterly state or local income taxes, investment-related expenses, dues. These must be paid by December 31 to obtain a deduction this year. Professional guidance will be helpful here. |
| 31st |
Evaluate
your progress for the year. How close were you to your budget? Recalculate
your net worth. Compare it to the value at the beginning of the year. How
did you do? |
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