As 2012 draws to a close, now is the time time to begin preparations for all of your End-of-Year reporting and tax requirements.

Meeting with your accountant is the most important financial thing you can do to get ready for the end of the year, and it’s not too late. Your accountant will be able to assess your fiscal situation and advise you on things such as your retirement plan, charitable contributions and other deductions that might lower your tax bill. Before you meet with your accountant, here are some things you should have ready:

• Property tax bills for the year.
• Letters from the charitable organizations you donated to – a letter should detail the monetary value of your gift to the organization.
• Relevant reports from Quicken or QuickBooks – and make sure the entered data is accurate and up-to-date.
• If you hand-write your checks, make sure you have all your receipts and that they are detailed enough to categorize the expense.
• Medical deductions for the year, if you qualify.

Retirement Accounts

People with IRAs and 401Ks should make sure they have maxed out their contributions for the year, including catch up contributions. The maximum contribution for individuals under 50 is $5,000 per year, while people over 50 are allowed to contribute $6,000. It’s best to see an accountant to ascertain your particular situation, because the laws governing retirement accounts can get rather complex in certain instances. If newly self-employed, make sure to open a self-employed retirement (SEP) account.

Flex Accounts

Flexible spending accounts allow you to buy health-related products with pre-tax dollars. The program is very popular but requires a taxpayer to “Use it or lose it” – meaning that funds left in your Flex account will be forfeited at the end of the year. While it is possible to obtain a refund, the money disbursed back to you will once again become subject to taxes. To take advantage of the tax savings this program was designed to offer, it’s best to “Use it.” Most items in a drugstore are eligible for Flex spending.

Bonuses and Gifts

End-of-Year is also the time of year when employers show their appreciation to their employees by issuing bonuses. All bonuses or gifts from an employer to an employee must be taxed, whether it’s an extra week’s pay or a smaller lump sum. The exception is if your workers are actually employed by a third party, like an agency or temp service. In those cases your gift or bonus would be considered a gift between two private individuals.

Insurance

Now is also the time to review your insurance policies. Life insurance, health insurance, even homeowner’s insurance need to reflect your life situation accurately. Major life changes like marriage, divorce or the arrival of a new baby require changes in coverage.

End-of-Year preparations don’t have to be a mad dash for receipts and bank statements. A qualified bookkeeper can simplify your life by organizing your data in a format that will save your accountant some time – and save you accountant fees.

Is keeping organized a challenge for you?  What would you rather to be doing during the time it takes you to pay your bills or balance your checkbook every month?

Contact me today to talk about your unique situation and see how I can help!