Year-End Financial "To-Do" List

The most important item on your year-end "to-do" list may not be related to your holiday shopping or parties. Checking your financial list twice could be the best gift you give yourself and your family. If you act now, there's still plenty of time to reduce your tax bill and boost your refund!
Local financial professional Dale McCarty from Retirement Designers Financial Group has 5 smart money moves to make before December 31st.

Why should we be thinking about our taxes now?

• To take advantage of some tax breaks - for retirement savings and charitable giving - you need to act before year-end.
• And we all know the month of December can be like a whirlwind with all the holiday festivities - I recommend you start now so you can enjoy the last month of the year.

How to lower a tax bill :

Donate to Charities
• You have until December 31st to make charitable donations that will count towards your 2016 contributions for tax purposes.
• I always tell my clients that every little bit counts so don't disregard cash, clothes or other items that you donated this year.
• Don't forget, you can always give your time! Many of the families I work with like to volunteer over the holidays to teach their kids and grandkids about giving back.
• You can't deduct the hours, but you might be able to deduct any out-of-pocket expenses directly linked to volunteering.
• It's important to get a receipt and value your donations of household items correctly. The IRS has helpful tips on how to deduct your charitable contributions and check a charity's status - links for that information are on

Max Out Retirement Contributions
• By increasing the amount you put into a tax-deferred account, like a 401(k) or an IRA, you can decrease the income you have to pay taxes on.
• However, there are contribution limits for both, so talk with a professional to help you decide how much to contribute.
• If you don't earn a lot of money, your contribution to an IRA could also be used to claim the retirement savings contributions credit.
• While it's true you can wait until the April 18 tax-filing deadline to contribute for the previous tax year, the sooner you put money into an IRA, the longer the earnings will grow tax-deferred.

Review FSA Account
• Your flexible spending account also requires year-end attention so you don't waste it.
• You can contribute up to $2,550 to an FSA via paycheck withdrawals.
• As with a 401(k), money goes into an FSA before your taxes are calculated, saving you some tax dollars.
• Be sure to check with your employer. If you must use your FSA money by Dec. 31, make sure you do.
• Some companies allow a grace period into the next year to use the untouched FSA funds - but not all - so it would be a good idea to check with your employer.

Take Advantage of Home Tax Breaks
• Homeownership provides a variety of tax breaks - some of which you can use by year-end to reduce your tax bill. I have some information on this on my website as well.
• You can also make your January mortgage payment by December 31 and deduct the mortgage interest on your coming tax return. The same is true for early property tax payments.

Pay College Costs Early
• The spring semester's bill isn't due until January, but it might be worthwhile to pay it before year's end.
• You may qualify for a maximum annual credit of $2,500 per eligible student.
• Tuition, fees and course materials for 4 years of undergraduate studies are eligible expenses under the American Opportunity Tax Credit. This includes expenses made during the current tax year, as well as expenses paid toward classes that begin in the first 3 months of the next year.
• To claim the credit or part of the credit, your income must be less than $90,000 (less than $180,000 for married filing jointly).

Does it mean we'll get a bigger refund check next year?
• Lowering your tax bill can translate to a bigger refund for some.
• Tax laws change every year, so it's always good to start working with a tax professional now to make sure you're taking all the deductions and looking for the credits that are available to you.