It’s hard to believe the year is halfway over. Now is a good time to review and determine what steps need to be taken to finish out the second half. Here are five topics to help you put together a nice mid year review.
- Income and taxes. If your income has increased this means your taxes are probably going up. Halfway through the year is a good time to make some projections. You can estimate what your tax increase might be on your own, or you can get with your adviser. Either way, if you believe at the end of the year you may owe more than what you paid, you can go ahead and make an estimated tax payment now to avoid a cash crunch at the end of the year.
- 401(k) Contributions. Re-evaluate your 401(k) contributions to see if any adjustments can be made. Your maximum allowable contribution for 2015 is $18,000 so if you have room, nudge your deferral up a little bit. Also, if you are over age 50, you can contribute an additional $6,000 above the maximum.
- Records. If you keep track of business mileage, sales tax, or any of the other annoying records the IRS wants you have for deductions then you are probably behind on them. Catching up now will save you time and effort when it comes tax time.
- Property Taxes. If you pay taxes on your property directly (not in escrow), check to make sure you have identified your source of funds. Many people keep a separate savings account just for property taxes. If your source of funds is a little short, plan out how you are going to accumulate the money you will need at the end of the year.
- Christmas in July. Shelly and I love Christmas, so that means it can get expensive. If you’re like us, it’s not a bad idea to spread out some of your gift purchases over the second half of the year. You can also set aside extra money in savings so it’s there in November.
Many people get caught at the end of the year with financial surprises that could have been caught and dealt with. Set aside some time now to think through where you are and where you need to be at the end of the year so you can head off any unexpected pitfalls.