10 spring financial and tax things to do

  1. As the new tax law is in effect, have you determined its impact versus your 2017 tax? Should you be adjusting your withholding or estimated payments? Do you understand what tax law changes affect you?
  2. See if you will be itemizing in 2018 under the new tax law. Based on the new higher standard deduction amounts of $12,000 for individuals and $24,000 for married couples filing jointly, see if your itemized deductions will exceed these amounts. Some itemized deductions rules have changed significantly. If you can’t itemize every year, you may be able to itemize in alternating years by bunching charitable contributions or other deductions every other year. If you are able to itemize, there has been no change in the tax treatment of charitable contributions.
  3. Check your retirement and insurance policy beneficiary designations, particularly if you or your family has had any major life transitions. These designations control what happens to your money, not your will or estate plan.
  4. Have a credit card that is used only for monthly or recurring charges. This credit card should not be used online. Don’t use it for shopping, at restaurants or gas stations. Have this separate credit card for only for cell phone bills, utilities, cable provider or other recurring items. Even though I am very careful, I have been subject to online credit card fraud each of the last three years with one of my “outside” credit cards, so having a separate credit card like this that is used only for recurring charges has been a huge timesaver.
  5. Review if your life and disability insurance policies are adequate, particularly if you have children who have not completed college.
  6. As your health is even more important than your finances, make sure you are taking care of yourself. Get an annual physical. Regularly get adequate sleep. Have medical tests done that are recommended for you, even if they are not fun. We all know which those are!
  7. Spring cleaning can mean donating clothes or household items you don’t wear or use. If you can benefit from itemizing, keep a list of what you donate and the receipt from the charity, so you can properly deduct these donations.
  8. Change some of your online passwords. Try to change one a week or 4 a month. And start using a password manager, like 1Password, to make your online life so much easier, securer and efficient. Long time readers and clients knew this would make the list…..but are you using a password manager?
  9. Check your projected Social Security benefits at ssa.gov if you have not started to collect Social Security. It is helpful to know your projected benefits and it’s good to review your past income data to ensure it’s accurate. You should do this every few years. This took me about 5 minutes. I had done this previously so I had an online account. They require you to change your password every 6 months and now send you a security code by text, as additional online security. It could not have been easier. I quickly retrieved my SSA password in 1Password and then stored the new password I created this week.
  10. Have a written investment policy, so you are investing with a plan and not reacting to market moves or basing investment decisions on guesswork, forecasts or your emotions. Clients of our firm all have written investment policies.
  11. Bonus item….just as spring cleaning can mean cleaning out closets and garages….idle cash sitting under a mattress, or more realistically at the bank earning a fraction of 1% is not wise. Short term US Treasury bills can yield around 2%, so don’t be satisfied with not earning interest on your cash savings.

We hope these tips are helpful to you and your family. Please feel free to share this information with others.

What is your next step? Which ones will you actually do?

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