There's just two months left to 2017 and, in addition to rapidly growing concern over what exactly you'll be wearing on New Year's Eve, it's also a few weeks for wrapping up any financial loose ends from 2016. Want to know how best to max out your tax savings for the year? There's still time to make a difference in your bottom line.
1. Check your financial institution accounts
Are you spending too much at financial institutions? Here are a few things to consider:
- If you signed up for credit cards with a 0% annual rate, check to see if that rate has expired. If it has, you might want to consider moving that balance to another card with a low annual rate.
- Were you getting a free checking account or signed up for a special offer that has expired? Check to see if your bank has started charging your account new fees.
- Are you a "points person"? If so, your user agreement may have changed and you might not be receiving the benefits you once had.
2. Use up your FSA money
Most FSA (flex savings accounts) are set up so that you use any money not spent on medical costs or child care costs during the year. Contributions into a FSA are pre-tax dollars, so it's a great way to lower your tax bill for the year—just make sure to use the money!
3. Donate, Donate, Donate
You can still make charitable contributions of clothes, household goods, etc, and have the ability to deduct those donations for 2016. Consider donating appreciated stock to avoid paying capital gains taxes while still being able to deduct the stock contribution on your tax return. Make sure to consult with a tax pro as there are limits specific to charitable contributions. Generally speaking, you can follow the 50-30-20 percent limits on itemized deductions.
Generally you can deduct:
Cash contributions in full up to 50 percent of your adjusted gross income. Property contributions in full up to 30 percent of your adjusted gross income. Contributions of appreciated capital gains assets in full up to 20 percent of your adjusted gross income. Any charitable contributions in excess on these limits can be carried over to the following tax year for a maximum of five years. Again, work with a tax pro to make sure you are clear about charitable deductions.
4. Increase your automatic savings for next year
Even increasing your automatic savings into your retirement accounts or savings accounts by 1 percent can make a huge difference. Every year you should aim to increase your monthly savings amount until you're able to save about 20 percent of your net income toward your various financial goals.
5. Defer or Speed Up Tax Deductions
You can ask your HR department to defer your annual bonus to the new year so you don't have to report that income in 2016. Or you can speed up tax deductions on your home mortgage by making January's monthly mortgage payment in December to claim the mortgage interest deduction in 2016 versus 2017. Work with your tax pro on these strategies to see how they would work for your specific situation.
What financial items are you planning on checking off in the coming week? Tell us in the comments below or fanpage Money Lover.