Those Last Minute Items

Thursday, December 17th, 2009 by Charles Mayfield, CFP®


No, I’m not talking about shopping for presents.  Hopefully, you have already knocked out all of your trips to the stores.  However, there are other matters which should be handled before the clock rolls over to 2010.  Here are a few things that you may want to remember to do before the New Year.


Charitable Contributions/Gifting:  Gifts to Charities are unlimited.  Some charitable contributions are even tax deductible, with certain limitations.  Making a gift to charity before the end of the year will usually provide you with a deduction for this year’s taxes.


Gifts to family members are never deductible, but there are limitations on how much you may gift in any given year.  You may gift up to $13,000 (the 2009 limit) to any person without it impacting your lifetime exclusion in 2009.  If you’re married, each spouse can exercise this right and bring your total gift up to $26,000.  Gifting is a tremendous tool in funding estate planning initiatives as well as future education spending for children.


401k Catch up Contributions:  If you’re over the age of 50 and are eligible for a 401k plan at work, you can defer an additional $5,500 into your retirement plan.  Talk to your employer about the opportunity to defer a larger percentage of your paycheck in the closing weeks of the year (perhaps use that year-end bonus check).


Flexible Spending Accounts (FSA’s):  Your employer may offer you a flexible spending account to defer money into for potentially qualified medical expensesIf so, that money needs to be used up before the plan year is out


Some uses of that money could be for prescriptions, teeth cleanings & new glasses or contacts.  Many employers have a January 1st deadline.  FSA money is a “use it or lose it” so make sure that account is empty before your deadline.

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