MADELEINE BRAND, host:
From NPR News, it's DAY TO DAY.
It's less than a month before the end of the year - not a lot of time to get your finances in order. But here with a few last minute tips is our personal finance expert Michelle Singletary. Hi, Michelle.
MICHELLE SINGLETARY: Hi.
BRAND: Well, so what are some tax-related moves people can do now before the end of the year?
SINGLETARY: Well, the first thing you want to do - I know you don't want to think about it right now because you're holiday shopping - but you want to start to collect all the things and paperworks that you're going to need to file your taxes - your retirement statements, you know, the statements that you've not been opening.
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Look over your bank statements, things that you're going to be deducting. And listen, if you are a teacher - because lots of teachers don't realized this -you can deduct some of those supplies that you've been buying out of your own pocket up to $250. So you want to start collecting those receipts.
So this is the time when you're not so frazzled and you're worried about pressing against that April deadline to get all the paperwork. And make sure you have all the statements that you need so you don't have to wait at the last moment to get them. Your mortgage statements - maybe there's some missing -because, you know, we got a pile of them on our desk that we have not been opening. Start to collect those.
BRAND: How do you know? Have you been in my house?
SINGLETARY: If it wasn't for my husband, I'd be right there with you.
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BRAND: And, Michelle, it should be said that now is a good time to make a tax-deductible charitable contribution.
SINGLETARY: That's right. You know, we've got a lot things in your house, or you want to make a donation and you've kind of procrastinating. This is the time to do it to get it in before the year end. Then there are new guidelines. The IRS has gotten a lot tougher on those deductions those charitable deductions. So you've got to get those receipts from the charities, and it has to be good stuff. You can't just give away junk there.
A lot tougher these days, and you want to go on the IRS Web site - irs.gov -and look at what you need to supply them with in case you're audited. And listen, look at your retirement plan. You may be able to put more money in. I'm sure many folks have not maxed out. The limit is fairly high - it's $14,000. Most people don't make that. But say you've gotten a year end bonus, with some extra money, you might want to beef up your retirement plan.
BRAND: And speaking of your job and yearend benefits, what about things such as flexible spending accounts?
SINGLETARY: Now, these are accounts where you're allowed to put pretax dollars away to pay for, say, dependent care. If you've got small children that are in before or after care or day care if they're under school age, you can put money away in these accounts before it's taxed, which saves you some taxes. But you've got to spend money out of these accounts for a lot of people before the end of the year. So you want to check, because if you don't put in for those reimbursements, you lose that money.
This is a use-or-lose kind of thing. You need to put in for whatever money that you put away in these flexible accounts, and it could be for dependent care or health care costs.
BRAND: Okay, what about cleaning up your credit? Can you do anything before it gets tarnished with all this Christmas spending?
SINGLETARY: Absolutely. This is the time to pull your credit report. Lots of folks may not realize it that you can get all of three of your credit reports for free every 12 months. You go to annualcreditreport.com. Forget any of those other Web sites. And you know what? That'll be a reminder for you not to spend so much on the holiday. You pull those reports and see all that debt you have. I'm telling, you going to stay at home.
BRAND: Okay. Michelle Singletary is our regular guest on matters of personal finance. Her latest book is “Your Money and Your Man: How You and Prince Charming Can Spend Well and Live Rich.” Thank you, Michelle.
SINGLETARY: You're welcome.
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BRAND: And if you have money questions for Michelle, we'd love to answer them. Go to our Web site, npr.org. Click on the Contact Us link - that's at the top of every page - and be sure to include Michelle in your subject line.