Financial Fitness in 2010

  • Get Your Finances in Shape!

    As many people head to the gym after New Year’s Day, resolving to slim down their bodies, now would also be a good time to commit to keeping your budget in shape as well. As a result of the recession, many Americans may have improved their spending and saving habits and plan on keeping them more modest and in order for the long term. If you’re looking for ways to improve your personal finances in the coming year, here are some tips from the California Society of Certified Public Accountants. Photo Credit: alancleaver_2000
    Take On Taxes
  • Take On Taxes

    Before you know it, it’ll be tax time, so you’ll want to be prepared. Know whether you’ll owe money or whether you should expect a refund. Find out what tax deductions and credits you qualify for. Make sure you’re aware of any tax rules that may have changed since last year. You can check the IRS Web site for federal tax rule changes. Plus, you’ll want to look for any tax rule changes affecting your state. Photo Credit: Robert S. Donovan
    Gather Your Paperwork
  • Gather Your Paperwork

    If you haven’t been keeping track already, you’ll have to gather all of your W-2, 1099 and other tax forms from employers, gather your receipts, make a list of your deductions and see what tax credits you might qualify for. The better you keep track of these things throughout the year, the easier it will be during tax time. Photo Credit: telethon
    The Dreaded AMT
  • The Dreaded AMT

    More and more American wage-earners are subject to the Alternative Minimum Tax. That’s because the AMT isn’t indexed to inflation. Initially, the AMT was meant to keep the wealthy in check by requiring them to pay at least a certain amount in taxes, keeping them from taking so many tax deductions that they had to pay little or no taxes at all. But now, if you made more than $46,700 in 2009, you may have to pay more in taxes than you might usually. To figure out how much you owe, you’ll have to do the math (or have someone do it for you). At home, you can use the Alternative Minimum Tax Assistant from the Internal Revenue Service to compare what your regular taxes would be and what your AMT payment would be and compare the two. If the AMT is higher, that’s what you’ll have to pay. Photo Credit: Matt Honan
    Health Insurance Check
  • Health Insurance Check

    Open enrollment season has passed, so hopefully you’ve taken a good look at how much you use your health insurance and have chosen the best health insurance option for you. If you’re resolving to quit your miserable job this year, or you leave under other circumstances, may sure you’ll still have insurance. If you keep your company’s health insurance under the Consolidated Omnibus Budget Reconciliation Act, a federal rule that may require employers to continue to offer you health insurance for as much as 18 months after you leave, you may have to pay more than your current premiums (which are usually taken out of each paycheck). Unfortunately, COBRA subsidies provided under the American Recovery and Reinvestment Act will no longer be available after 2009, according to the IRS. Photo Credit: Seattle Municipal Archives
    Check Your IRA
  • Check Your IRA

    As of January, people with Individual Retirement Accounts should take a look at where they stand. Currently, only people who make less than $100,000 a year can convert their regular IRA to a potentially tax-advantaged Roth IRA, which allows you to take tax-free distributions when you retire. Starting in 2010, however, that rule will no longer exist, notes the California Society of CPAs . That means, if you plan on passing on your IRA savings to your children or grandchildren, they won’t have to pay taxes on those funds. Photo Credit:mortgagepaymentplan
    Check Your Debt
  • Check Your Debt

    If you carry credit card debt, it may seem easier to pay off credit cards with smaller balances first. But you’ll save money in the long run if you pay more attention to chipping away at debt that’s subject to the highest interest rates. And hopefully your holiday purchases haven’t tacked on more to your credit card debt. If so, you might still be paying off those purchases a year from now. The California Society of CPAs suggests devoting any holiday money or year-end bonuses you get to paying off your credit card bills, especially if you’ve made holiday purchases using your credit card. Photo Credit: Andres Rueda
    Be Good With Your Raise
  • Be Good With Your Raise

    If you're expecting a raise in 2010, you might want to save some of the extra money for retirement. If you contribute all of the additional money you get toward your retirement, you may not even notice the difference. And even a few dollars or a few hundred dollars per month more will add up over time, CPAs note. Photo Credit: Alex E. Proimos
    Automate Your Finances
  • Automate Your Finances

    To avoid late fees, over-limit fees and other surcharges, set up automatic bill payments and bank transfers wherever possible. It could protect your credit score and keep your credit card interest rates from increasing (we hope). Plus, you’ll save on postage. Photo Credit: Don Hankins
    Take Stock of Your Stuff
  • Take Stock of Your Stuff

    Make sure you have enough homeowners insurance or renters insurance to cover you. Especially if you’ve received valuable items in 2009. The California Society of CPAs suggests going around your house with a camera to help you take stock of your belongings. Additionally, in case of an emergency, make sure you have enough money saved to get by for at least three to six months to make sure that unexpected bills don’t turn into unexpected debt. Photo Credit: Playingwithbrushes
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