5 Financial Tips for the end of 2010
Wednesday, December 08, 2010
Looks like Congress is going to give us an early gift by extending tax cuts. As it is the holiday season, what better way to celebrate than a thorough financial evaluation? OK, it’s not exactly diamonds or tickets to PPAC, but December is a good month to get your financial house in order heading into the New Year. Here are some things you can do now before your house is inundated with visiting relatives:
Take advantage of the energy efficient home improvement credit – Feeling a draft from those old windows? Until the end of the year, energy-efficient home repairs can result in a federal tax credit. This includes replacing windows, doors, and/or HVAC systems and installing new insulation. If you plan on making any of these improvements in the near term and you can afford it, now is the time to move ahead to take advantage of the tax credit.
Convert that IRA to a Roth – You may never have this chance again. No income limits. Taxes spread over two years. If you have a traditional IRA and cash outside of retirement accounts to pay the taxes due on conversion, this might be a home run for you. The most attractive feature of the Roth IRA? No Required Minimum Distributions once you reach age 70 ½.
Review your estate planning – The plan currently passing through Congress puts the maximum estate tax at 35% on thresholds above $5 million. If you’ve had an estate plan completed, it’s time to pull those documents out of the filing cabinet and take a look. Remember that you need to take into account life insurance policies you own and business interests when calculating your estate.
Dan Forbes is a regular contributor on business financial issues. He leads the firm Forbes Financial Planning and can be reached at email@example.com