If you haven’t already done so, prepare a financial plan and a budgeting system for monitoring your income, expenses, assets, and liabilities. The information you collect will enable you to start planning for retirement or other major life events. Use last year’s information to establish a budget for the coming year.

Set Up an Effective Filing System

Set up a well-organized filing system for storing your important documents and records.

Prepare for Taxes

Start getting ready for preparing your tax return for the preceding year. As you receive Forms W-2 and 1099 and other tax documents, file them immediately. This will reduce time spent looking for them later.

Request a Social Security number for any child regardless of age who does not already have one.

Buy a New Car
If you need a new car, now is a great time to purchase or lease. Frequently, dealers are anxious to clear out last year’s inventory prior to year-end. In making your choice, consider the federal tax (and occasional state tax) advantages for buying fuel-efficient vehicles.

Examine Investments
Examine your current investments to determine those with unrealized losses. Consider selling those investments to take the loss this year. You can deduct up to $3,000 in capital losses in excess of capital gains. However, do not let the tax savings outweigh the investment potential. You might consider “swapping” for a similar company in the same industry if you like the potential of the industry.

Pay Tax-Deductible Expenses
Consider paying tax-deductible expenses prior to year-end. Some common examples are real estate taxes, quarterly state or local income taxes, investment-related expenses, and dues. These must be paid by December 31 to obtain a deduction this year. Professional guidance will be helpful here, so please call us.

Evaluate Your Progress
Evaluate your progress for the year. How close were you to your budget? Recalculate your net worth. Compare it to the value at the beginning of the year. How did you do?