3 End of Year Financial Tips

Are you ready for 2020? As we enter this new decade, it can be helpful to get organized as you gear up to build your wealth and improve your financial wellness next year. Luckily, staying on track in 2020 doesn’t have to be overwhelming. In fact, there are several ways you can get ahead before December 31st that don’t require too much time or energy. These three year-end financial tips will help you to hit the ground running next year! 

#1: Prepare Your Taxes

Don’t wait until April 15th to get your taxes organized and submitted. You can take the time now during the year-end lull to organize what you need to file at the beginning of the year. Tax prep means gathering the following documents:

  1. Social Security or Tax ID number of anyone filing.
  2. End of year Payroll Stub with Year to Date info and Tax Statement. (Note: employers will send out W-2 in January).
  3. Bank and financial institution statements.
  4. Last year’s tax documents.
  5. 1099 Forms (if applicable).
  6. Self-employment records and supporting documents.
  7. Medical expense receipts.
  8. Charitable donation records.
  9. Mortgage statements.

The more documents you can gather upfront, the more likely you’ll be to file quickly and correctly. Need help? Reach out to your CPA or financial planner to find out what documents you can start gathering.

#2: Review Your Budget

Year-end is a great time to assess your spending and take stock of the progress you made toward your financial goals this year. Whether you track your spending using an app like YNAB or Mint, or you just review bank statements periodically, now is the time to sit down with your spouse or partner and take a closer look at your budget. 

Remember: don’t review your budget with too critical an eye. Instead, try to look at it objectively. What goals did you achieve? What areas of your finances need improvement? Small adjustments may make a positive impact in 2020. 

#3: Max Out Savings Accounts

Have you topped off your savings accounts this year? Your workplace 401(k) or retirement savings plan, IRA, and HSA should all be on your list for extra contributions toward the end of the year. The more you’re able to contribute now, the more you’re able to save toward retirement and reduce your taxable income for next filing season. In 2019, contribution limits are:

  1. 401k - $19,000 with an extra $6,000 “catch up” contribution if you’re 50 or older
  2. IRA - $6,000 or $7,000 if you’re 50 or older
  3. HSA - $3,500 for individuals, $7,000 for families, with an extra $1,000 “catch up” contribution if you’re 50 or older

Looking For More Year-End Financial To Do’s?

These three actionable steps are an excellent place to start your year-end financial organization. However, if you’re looking for more ideas, reach out! We’d love to help you get organized as you look toward 2020.

Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs, and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.

"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.

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