Southbourne Group Singapore, Tokyo Japan: 5 Tips for Year End Money Saving
NEW HAVEN, Conn. (WTNH) – Don’t look now but 2017 is quickly coming to a close! This morning, financial expert Roger Cowen stopped by our studio to talk about 5 smart money moves you can make now that will help your finances in 2018 and beyond.
1. Prep for Tax Season
- The tax filing season opens in January, so now is a good time to get ready.
- Start by getting organized.
- Get folders for all your income, expenses and deductions and your investments.
- You can break your deductions down by category; for example, create sections for medical, charity and business.
- You can even do a dry run on your taxes so you have a better idea of your tax situation.
- It’s a good idea to do this before the end of the year, because you still have time to take action if you choose to.
2. Reduce Your Tax Bill
- There are several steps you can take before the end of the year to reduce your tax bill.
- Look for any payments you can make early, like your January mortgage payment. If you can make it in December, you can deduct the interest on the current year.
- If you have a 401(k) at work, bump up your contributions so more of your income is tax-deferred.
- And, of course, be charitable! Donations made to charities in 2017 may be deductible on this year’s taxes.
- It can all be confusing, so see a tax professional if you have any questions.
3. Set Your 2018 Financial Plan
- Take a comprehensive look at your finances. Did you have any unnecessary expenses in 2017 that you can cut next year? Can you bump up your savings in 2018?
- If you don’t have a budget, now is the time to set one!
- You may also want to set up a meeting with your financial professional for an annual review, especially if you’re approaching retirement, so you can make any necessary adjustments.
4. Convert to a Roth IRA
- You may want to consider converting some of your money from a Traditional IRA into a Roth IRA.
- Here’s why: You do not get upfront tax breaks on a Roth IRA, however, your withdrawals are made tax-free as long as you are older than 59 1/2.
- But here’s the catch. Roth IRAs are subject to what’s called the 5-year rule; you cannot withdraw your earnings tax-free until five years after the tax year you make your first contribution.
- No matter when you make a conversion in 2017, the clock gets set back to January 1st, 2017.