by Richard Bell
Posted 12/2/2013 12:00 am
Updated 9 months ago
You’re probably putting together your Christmas gift list. But there’s one other important checklist you need to get started before Dec. 31. Whether you’re an individual or business owner, there are five things you need to consider before the year ends.
1. If you haven’t maximized your 401(k) and IRA contributions, do it before year-end. Building wealth is a slow process, so take every opportunity you can to invest in your tax-deferred accounts. Also, with the S&P up more than 20 percent this year, it may be time to rebalance your investments and 401k.
2. Complete all those bookkeeping items you’ve been putting off. Make sure you have the details of any major transactions, like property and stock sales or major purchase details. The more complete your information the faster you can prepare your tax return, meaning the faster you’ll get that refund.
3. If you’re a business owner, assess your capital expenditure needs. If you need new equipment, now is the time to replace it. However, if you don’t need the equipment now, it is always better to just pay the tax. Technically, you are only deferring the taxes to potentially higher rates in the future.
4. Review your insurance. Health care, home, auto — if it’s insured, check to make sure it’s accurate or if there’s a better rate available. Also, review your estate planning and your life insurance needs as well. No one likes to think about this, but it’s a good time to make sure your family is taken care of in the coming new year.
5. If you use a financial manager, CPA or tax planning professional, set an appointment to start communicating. Once the New Year starts, it’s usually too late to realize all the potential that might be available to you. Like the old saying goes, “Failing to plan is planning to fail.” n
Richard Bell is an expert analyst on accounting strategies specific to small business, medical professionals and the trucking industry. He is founder and president of Bell & Co.