With 2012 just a few days away, it is not too late to save some money in 2011 and to help your tax bill in the New Year. From MSNBC’s Today’s Money, here are some moves to make to help you save:
- Max out your 401(k) – You can contribute up to $16,500 in 2011. You may have already missed the cutoff date with your employer, but it is important to note that in 2012 it’s going to increase $500. Tell your employer now that you want to up your contribution amount in 2012.
- Add money to your IRA –Many people who are self-employed or small business owners are adding money to their IRA accounts. Individuals are allowed to contribute up to $3,050 and $6,150 for families.
- Pay your tax-deductible bills – This means prepay your mortgage or other bills. You can pay for it for this month and get credit for your 2011 taxes. This can also be done for real estate taxes, student loan debts, and medical expenses. Check with a tax professional to make sure this makes sense for you.
- Make a charitable contribution – In the season of giving, it is nice to give to others but it also helps you lower your taxes. Remember to save all receipts to ensure you’ll get tax credit. Websites such as charitynavigator.com are great tools to see where to donate and all the appropriate steps to do so.
- Use all funds in flex spending account – If you have a flex spending account, with the use-it-or-lose-it requirement, you want to be sure you have used all funds. If funds remain, consider eligible expenses that you could pick up now for the New Year. A few examples include certain over-the-counter medicines, certain weight-loss treatments, specialized foods for a medical condition, dietary supplements, and more. Also consider inquiring about picking up prescriptions medicines in a larger volume – maybe 2 months at a time – to use up your FSA funds. (Note that some of these may require a prescription or letter of medical necessity from your doctor).
It is not to late to save for 2011! For more great tips, click here for an informative video from MSNBC. Are you ready for 2012? Comment below!