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Archive for December, 2012

5 Things You Should Plan Financially For 2013

Another year is finally ending and we hope you’ve had a good one. Luckily, time never ends just because there’s a new year. Unluckily, time never ends just because there’s a new year either. What this means is that we continually either progress, regress, or stagnate. Change can happen and we can still be standing still; that just won’t get things done.

It’s in that vein that we mention these 5 things you should plan on addressing in some fashion in 2013 to help push things forward in your financial life. They’re not necessarily easy, but if they were then where would the pride come from in doing great things for yourself? Here we go:

1. Get your taxes out of the way. Hopefully you’ve pulled together everything you need to get your taxes to your accountant or tax preparer, or even if you’re doing your own, so you can get this over and done with as soon as possible. Whether you’re getting a refund or not, you can get this behind you so that it’s nothing you have to worry about later on, even if you end up needing an extension for whatever reason.

2. Think about investing some of your money. The economy is getting better, even if it’s moving slowly, so it’s a good time to think about doing something with a portion of your money to work towards your future. While putting money in a savings account is safe, you also won’t generate almost anything from it. There are lots of different plans to look at, some that will pay you 3.5%, some that might pay more than that. Find a financial advisor who you can talk to about it.

3. Pay down some more of your debt. We all like new things, but interest rates for things we want are higher than any growth of money we might put away for ourselves. Even relatively small increases in monthly payments can help you pay down balances faster, and if you keep a better eye on your purchases, maybe use cash or your debit card more often for them, you can rein in your spending and your debt issues.

4. Verify your insurance coverages. This should be something you did before you got it but it’s something you should check. You need to know what your medical insurance won’t cover to see if you should be putting away extra money just in case. Will your life insurance cover the balance of the payment on your home if you or your spouse passes away? How high is the deductible on your car?

5. Can you increase your income? We don’t mean asking for a raise. In the book The Millionaire Maker by Lorel Langemeyer, she talks about helping families find ways of making money based on skills they have, whether they’re related to their job or not. A part time job if you need one is one thing; creating a career based on something you like to do will feel more rewarding, might pay more, and could even turn into a full time thing if you find there’s a serious need for someone with your skills or products, if you’re good at creating things.

Preparing For Tax Season

True, it’s still 2012, but that doesn’t mean that you need to wait until the last minute to prepare for your 2013 tax returns. Before we get into that, we’d like to remind you of our previous posts Trip Expenses You Can Deduct and Are You Preparing For Next Years Taxes Yet.

Here are some highlights we’d like to remind everyone about:

Child Tax Credit is $1,000 per child now, but decreases to $500 in 2013.

Earned Income Credit up to 3 children has a maximum credit of $5,891. This year there’s certain proof you have to provide to qualify for the credit which includes school records, medical records, utility bills, and property tax records. Check out the new form to see what’s specifically required of you.

Business mileage for 2012 is 55.5 cents a mile, and in 2013 it goes up to 56.5.

There’s no increase in capital gains taxes for 2012, but in 2013 it increases to 20%.

Student loan interest gives a deduction up to $2,500.

The electronic filing date has been pushed back until January 22nd in 2013; no real idea why, but last year some people waited longer than normal for their refunds so maybe it’s related to that.

If you had a lot of medical expenses and kept all your receipts, make sure to bring them in to see if you might qualify for some write-offs.

More changes for 2013? No one knows yet. You’ve probably heard “fiscal cliff” until you’re sick of it but no one knows what’s coming just yet. We know that someone will have increased taxes but unsure of who. We also know that more changes will come to health care in 2013, though the bill officially doesn’t kick in until 2014, and we’re unsure what that might mean financially right now either.

Overall, just be prepared for anything, and of course don’t wait until the last minute to get your information to your accountant or tax professional, as corporate taxes this year are due on March 15th.