The 12 Tax Tips of Christmas:
#6 Watch out for AMT issues
The 12 Tax Tips of Christmas:
#7 Defer income

2009 Year-end Money Moves: Details

Finished your holiday shopping yet? That's OK. Some of the best gifts and the most fun searching for them comes from the last-minute excitement.

But you shouldn't handle your finances that way.

To help you get your money management, if not your money itself, in better order, we wrap up our 2009 Year-end Money Moves series with a look at details.

Yearend money moves_5_details Taking care of these fiscal housekeeping tasks now and updating them at least annually will help you stay on top of your money. And knowing what you have will help you maximize it.

Get organized
This year I converted most of my financial paperwork from paper to electronic. Now most of my bills and all my bank and financial statements arrive electronically, or at least the notice that they're ready does so I can download the documents at my leisure.

OK, the old-school paper documents from pre-electronic conversion are still stacked up in my office. Separate stacks, at least, but not properly filed in their respective file cabinet folders. So is the paperwork from things like home repair or improvement (which we've had a lot of in 2009!).

But going digital with as much as possible has simplified things and kept those aforementioned stacks of statements from years past from piling up any higher.

Choose the organization method that best suits you, but choose one! Then follow it. It does you little good to have piles of paper that you have to rifle through in order to find the information you need. Trust me, I've been there way too many times!

When you do file your financial documents, either papers by hand or electronic files on your computer, make sure your organization system includes a category for taxes. You'll want to put, for example, all your receipts for deductions, such as business expenses and charitable gifts, and income statements (salary and investments) in a place where you can easily get to all of them when it's time to fill out your 2009 return next year.

Since you'll probably still have some paper documents, I suggest getting an accordion folder. This filing option is expandable and easily portable, allowing you to grab the folder and take all your necessary documentation to your workspace or accountant if you hire out the job.

And remember that if you're filing system is all or mostly electronic, back that stuff up regularly. Use both an off-site backup system, as well as saving at least the most critical data to a CD or flash drive.

Put estate documents in place
Most of us tend to put this off ... including, obviously, the Congress this year. That's a big mistake, definitely for you and me. We'll have to see what kind of problems Capitol Hill's procrastination causes both lawmakers and us.

While we have to wait for the folks in D.C. to act on the soon-to-expire estate tax, we still can take action because we can be sure that the tax will eventually be back.

Mortality is not a comfortable consideration, but not properly preparing for the inevitable is not going to stop it. And delaying these financial tasks will only make things more difficult for your family.

So do everyone a favor and at least think about these issues before the end of the year.Make sure your beneficiary designations are up to date, on insurance policies as well as financial (especially retirement) accounts.

You can always change your documents later as needed, but it's critical to get something in place as a start.

Tell your spouse or partner
The hubby and I are equal partners. But when it comes to the actual, day-to-day administration of financial duties, we split the responsibilities. I suspect most couples do the same.

And I suspect these couples also are like the hubby and me in that while they know the other's responsibilities are crucial, we don't know exactly how they accomplish the tasks that we all too often take for granted.

So take a few minutes each year to discuss the mechanics. And be sure to thank your better half for all he or she is doing!

Write it down
In addition to talking about your respective household financial duties, put all the details on paper. As I urged earlier, make backup copies, both in paper form as well as electronically, e.g., on a flash drive of CD you can put in a safe place.

Create an emergency letter for each other, listing the details you probably do know about each other -- birth date, Social Security number, extended family contact info, employment data -- as well as stuff that just doesn't tend to come up in daily conversation, such as drivers license numbers, credit card account numbers (some creditors issue each account holder a slightly different set of digits), etc.

You'll also want to include in this comprehensive list:
  • Location of wills, trusts, dates completed, attorney, executors, birth certificate information and location
  • All bank accounts, savings, money market accounts, etc.
  • Safety deposit box information
  • Annuities, dividends, interest earned, part time jobs, business, etc.
  • Brokerage accounts, 401(k), SEP/Keogh, stocks, IRAs, bonds, etc.
  • Registration data for autos and other vehicles
  • Deeds to your residence and other real property; note balances owed, loan company information and account numbers
  • Insurance policies on your residence, vacation property; include account numbers, addresses, amount of coverage, agent's name and address, etc.
  • Other insurance, e.g., life, health, auto, long-term care, umbrella policies; include account numbers, addresses, amount of coverage, agent's name and address, etc.
  • Creditor data, including the companies and the account numbers, e.g., personal loans, credit card accounts, note balances owed, etc.

If you've organized your documents, gathering the information and compiling it an easy to access format will be a snap.

Don't forget financial passwords
Sharing this crucial computer access information is especially important if one or both of you handles accounts electronically. If something happens and your partner isn't able to take care of this or provide the details, you'll need to assume his or her duties in this area until he or she can resume them. So be sure to include your passwords, as well as your security Q&As, on your financial document list.

Check on the parents
It's also a good time to check up on your parents, especially if they're older and you don't see them regularly. You might have done this when you, your folks and your siblings got together over the holidays. If so, great! If you didn't want to bog down the festivities with real-life concerns then, take some time -- and do it soon -- to have this difficult but necessary discussion with your family.

Whew! Yes, it's a lot of stuff to do in very little time. But even if you can't take care of it all by Dec. 31, at least get started. Once you get the framework in place, the annual maintenance will be easier at the end of next year.

If you missed any of our previous four parts -- Taxes, Investments, Retirement and Giving -- of this year-end money moves series, just click the links in the related posts list below.

And have a Merry Christmas, Happy Holidays and a Very Prosperous 2010!

Related posts:

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Ron Stone

Thanks for the advice and reminders. They jogged my memory on a few items to do. I too try to avoid paper but it can be a struggle.

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