YOUR TAX-TIME FINANCIAL REVIEW

It's the new year … and that means it's time to review your financial affairs. Take advantage of all of that top-of-mind tax-time knowledge and increase your changes of a fiscally sound 2018.

KEEP GOOD RECORDS FOR MUTUAL FUNDS

Brokers are required to report your cost basis to the IRS. Without good recordkeeping, you may not be able to prove you were overtaxed because of incorrect basis reporting by your broker. You can avoid problems caused by errors in reporting by keeping detailed records of every transaction. Work with your broker to ensure your records match with the information he or she is reporting to the IRS.

AVOID HIGH RMD PENALTIES

Required minimum distribution (RMD) rules are pretty strict. If you don't want to face a hefty fine, you must withdraw a certain amount of money every year from tax-deferred retirement plans like 401(k)s  and traditional IRAs after you reach age 70½.  The withdrawals you make are then taxed as ordinary income. Not following these rules can lead to a penalty equal to 50% of the amount that should have been withdrawn, plus regular tax.

BUSINESS OWNERS: FORMS DUE JAN. 31

Don't forget that Jan. 31 is an important due date if you own a business, or have a side business in addition to your regular job.

 

Avoid fines by making sure Forms W-2 and 1099-MISC are postmarked or sent electronically by this date to the IRS as well to the people you did business with in 2017. Remember, you may face separate fines for each late form. The Jan. 31 deadline for these forms was unified as part of the IRS's larger effort to minimize refund fraud.

UPDATE YOUR MILEAGE RATE REIMBURSEMENTS

If you plan on using your vehicle for business, medical appointments or moving during 2018, make sure you know the standard mileage rates have changed. The standard business mileage rate increased to 54.5 cents per mile (up from 53.5 cents in 2017). The medical and moving rates also increased by 1 cent, to 18 cents per mile. Charitable rates remain at 14 cents per mile.

IS IT TIME TO UPDATE YOUR BENEFICIARY LIST

Simply said, your beneficiary designations are important. It's just as important to keep your list up to date. Consider making it a priority or things might not go as you planned.

YOUR BUSINESS YEAR-END HEALTH CHECK

Just like people, businesses need yearly checkups. Follow these seven suggestions and take some time this December to look into the health of your business.