Christmas shopping isn’t the only important item on your end-of-the-year list of things to do. There are several financial items you should also check to set yourself up for a great 2023 and potentially save money on taxes this year and get a bigger refund.
Top Ten End-Of-Year Financial Checklist
1. Make sure you have not been paying too little tax on your income this year using the IRS paycheck checkup tax withholding calculator
2. If you have any money left over for the year, consider putting it into your 401(k) plan. It will help boost your savings for retirement and will lower your taxable income for this year
3. Plan how you will spend your money for Christmas by creating a list and assigning a dollar amount so you don’t overspend
4. Reflect upon your spending. How did you do in 2022? Could you have done better?
5. Make some financial goals for 2023. Do you have any debt? If so, plan to pay it off before the end of next year. Also, create a goal for what you can save next year
6. Use any FSA funds you may have. This is tax-free money that you will lose at the end of the year if you don’t use it
7. If you have an HSA, consider maxing it out for this year to get those extra health savings
8. If you’re a business owner, consider whether you qualify for the QBI deduction
9. If you have business expenses, consider if it makes sense to defer or accelerate the costs to reduce your overall tax liability
10. If you are in a low tax bracket this year and your income next year will push you into a higher one, consider setting up a Roth conversion while your tax rate is low and have that income grow tax-free
Make Your End-of-Year Financial Review a Family Tradition
Your year-end financial checklist should also include a status check with your family. Teaching your kids how to manage their money when their young will help them become financially successful adults.
In this discussion, you should cover things such as:
- What was your budget for 2022, and did your family hold to it? What should your budget be for 2023.
- How much did you hope to save in 2022, and were you successful? How should that change next year?
- Was your family overpaying for certain expenses like utilities or cell phones? How can you trim those down next year?
- Were you paying off debt at the beginning of the year? Were you able to pay it off? What goal should you set for next year?
- Does your family have any large purchases on the horizon you need to plan for? Set a goal you can work toward together.
You certainly don’t have to hit all of these goals by the end of the year. However, as you look at this list, try to find at least 2-3 things that you can commit to handling before December 31 and maybe another 2-3 that you can commit to at the start of next year.
This isn’t about getting EVERYTHING right. It’s about making
consistent forward progress one step at a time. What next step will you
take?
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