For many, the holiday season is in full swing, despite disruptions in the supply chain, which may impact the purchases we make.
There is good news to report. The economy has rebounded, Covid vaccines are more widely available and there are reports that air travel will return to peak levels this holiday season.
With the hustle and bustle of our lives, it is easy to overlook several of the important financial dates for this month.
- December 31– Last day to take required minimum distributions for your IRA, 401(k) and inherited IRAs. You generally have to start taking withdrawals from your IRA, SEP-IRA, SIMPLE IRA, or retirement plan account when you reach age 72 (70 ½ if you reach 70 ½ before January 1, 2020). Financial institutions may require you to request distributions before the deadline to allow processing.
- December 31: Deadline to set up most types of retirement accounts so that eligible contributions count toward the current year.
- December 31 – Deadline for 2021 charitable contributions. Recent legislation includes several provisions to help individuals and businesses who give to charity. The new law generally extends four temporary tax changes through the end of 2021.
Create a Budget and Track Expenses
December is an excellent time to review expenses for the year, which can help with planning your budget for 2022.
For instance, are you planning a vacation in 2022 or will you wait for a later time?
Maybe you found yourself tapping your emergency or savings accounts during this year. If so, it will be important to replace those funds when you are able to do so.
Creating a budget or spending plan is important to maintain overall control of income and expenses. From spreadsheets to paper and pen, to mobile apps, there are many ways to track spending. Finding the method that works best for you is important to ensure your success and provide you with the peace of mind that comes when your finances are in order.