Tax and Estate Planning: Timely fiscal exam may be just what the doctor ordered

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Now is a good time to give some thought to your financial future. Financial experts from Family Credit Counseling Service, A. G. Edwards & Sons and H&R Block have some resolutions to help you get in shape financially, and stay that way.

Have a plan. Track your family?s spending to determine where all of your ?extra? money goes and create a detailed monthly budget. Analyze all of your expenses each month and be sure you need and/or use all of the services you pay for. ?Getting your finances under control does not happen overnight and there is no sense in compromising your health by stressing about it every day,? says Jeff Telling, manager of the Bloomington-Normal, Ill., branch of Family Credit Counseling Service. ?Make a commitment to becoming debt-free and be vigilant about meeting your financial goals.?

Save for retirement. Start now. Not only will you be protecting your future, but also in certain situations you?ll enjoy tax benefits today.

Review all credit card debt and interest rates. One way to pay down your debt is to make the minimum payments on all of your cards and pay all excess income to the creditor with the highest interest rate. You can determine your monthly debt payments by using a credit calculator like the one at www.teachmeaboutcredit.org. Also, it never hurts to contact your creditors and ask for reduced rates.

Review your W-4 withholding. Fine-tuning your payroll deduction gives you the opportunity to increase cash flow, reduce year-end tax liability or boost your refund. Think about your financial requirements and objectives and take command of your paycheck.

Save for major purchases. Hold off on major purchases and instead save for future comfort and unexpected expenses. If you put your money toward credit card payments instead of unnecessary purchases, you?ll save thousands of dollars in interest that could be spent on big-ticket items such as vacations and other personal and family goals down the road. ?Think of it as buying peace of mind instead,? Telling says.

Match investment gains with losses. For example, if an investor had incurred $2,500 in capital losses and also had a $2,500 capital gain, these can offset each other, says Max Lalicker, a financial consultant with A. G. Edwards & Sons in Peoria, Ill. In addition, an investor can use up to $3,000 in net capital losses to reduce ordinary income. Any additional capital losses may be carried forward to offset future capital gains and/or ordinary income in subsequent years. Mandatory minimum distributions for traditional IRAs must be taken by Dec. 31 of each year. If a person owns several individual retirement accounts, the required amount for all of the IRAs must be calculated, Lalicker says. However the required minimum distribution may be taken from only one.

Estimate your income and deductions. Assessing this year?s likely income against your projected earnings next year is the key to making wise decisions at tax time. If it looks like you?ll make more in this year than next, you may find that you?re ineligible for important credits and deductions this year. Hence, the wisest course may be to defer as much income as possible into next year.

Conversely, if you expect to make more next year than this year, you may want to report as much as possible this year in order to minimize the taxes you?ll owe next year. Balancing income between tax years sounds complicated, but it?s really just a matter of finessing deductions and credits to work to your benefit, according to H&R Block.

Assess your options. If you?re an employee, your ability to shift income from one year to the next may be limited. You can, however, reduce your income next year by increasing the amount of pretax salary deferrals to your 401(k) or other employer benefit plans. This tax-free money is like giving yourself a raise.

Think about a charitable gift. Making a charitable donation by year-end can help reduce your taxable income for this year.