A Few Year-End Tasks You Should Do
It seems like the holiday season is filled with things to do. Every day more and more gets added to the to-do list. As our list grow longer, we simply can’t do them all. Something has to go. There are many tasks that get left undone or put off for another day. But when it comes to finances, there are a few year-end tasks that are definitely worth doing before the calendar turns to the new year.
Fund Retirement Accounts
As the year comes to a close, it is a great time to think about your future and putting money aside for retirement. If you have a tax-deferred account, like a 401(k), making a contribution before the year ends can help you to reduce your taxable income while investing in your future. When it comes to IRAs, you do have a little more time. You are allowed to make contributions attributable to 2023 until April 15, 2024. However, please note that if you are planning on doing a conversion from a traditional IRA to a Roth IRA, those must be completed by December 29, 2023 (the last business day of the year) if you want to count it toward your income in 2023.
Donate to Charities
There are so many great charities that seek to address various problems, and year’s end can be a great time to donate. Donations made by the end of the year can be deducted from your taxes (if you itemize rather than claiming the standard deduction). If you are planning to give in the near future, you may want to consider giving before the end of the year to get the tax advantage of the gift.
Contribute to College Savings Accounts
While you’re considering charitable donations, you should remember that they say “Charity begins at home” and think about adding money to your children’s college savings accounts. These contributions need to be made by December 29, 2023, in order to count toward 2023. In some states, you may be able to deduct part or all of your contributions from your state taxes.
Spend Remaining Money in Flexible Savings Accounts
In addition to making contributions, you also need to consider spending some of the contributions you’ve made to flexible savings accounts. Sometimes these accounts need to be completely drained by the end of the year to avoid losing the balance. In other cases, some amount can be rolled over into the next year. You’ll want to check on the specific regulations for your account so that you don’t lose any contributed funds.
Evaluate Your Goals, Budget, and Investments
Finally, the end of the year is always a good time to take stock of where you are financially and where you want to go next year. While this can happen at any time throughout the year, adding it to your year-end tasks can help you to start the new year on the right foot. Be sure to use the helpful and convenient tools that Federated Bank offers, like mobile banking, mobile or online Bill Pay, and CardValet to track, manage, and protect your finances in 2024 and beyond.
