Before the year ends there are few things to do to close out this year and begin next year. First find your most recent paycheck. Use that to figure out how much you will make, how much was taken out in taxes and how much you invested in your 401K. If you have some money you saved to cover your expenses for the rest of the year, contact your payroll department and have them increase your 401K contribution for the last paycheck of the year. You can change that amount every paycheck if you want. Now take the totals from your paycheck and do a quick calculation on how your taxes may come out. If you didn't contribute enough, contact payroll and have them take out more on that last check so you don't have a big tax bill in April. If you have contributed too much have payroll lower your tax deduction on your last check. No sense in waiting until next year to get your hands on that money. I use Turbotax to calculate my taxes. I usually just take last years version and input this years nunbers to get a rough estimate. Also, you can just use the free online version to do this quick calculation.
Now, think about any other year end tasks, like paying personal property tax to the state or estimated taxes if your self employed. Have you made your charitable contributions? If not, now would be a good time to do it. And since you just did a quick tax calculation would a bigger contribution knock you down a tax bracket. If you are self employed you should have some type of IRA. Make a contribution to that before the year is over. Some of the IRAs require your contribution before the year is up. The website Cashmoneylife has had a whole series of articles on self employed retirement options. I recommend reading them.
Posts
