There's still some financial housekeeping left. These tasks, which will help you stay on top of your money and taxes are highlighted here in part five of Don't Mess With Taxes' fourth annual Year-end Money Moves series.
It does you no good to have information if you can't easily get to it. If your finances and simply stacked up on your desk (or, as I tend to do, on your floor), now's the time to get those documents in some sort of order.
I'm still a paper devotee. When I gather up all my documents from my office floor, they go into filing cabinets. Then at the end of the year, or early in the new year, those file folders get a going through.
Documents that I need to keep, such as year-end account statements and tax form copies, go into my archives. These official repositories are simply boxes, on which I clearly note the year. That way if or when I need them, I know which box to take down from my storage closet shelves.
Of course, more of my statements these days are arriving electronically. That makes it easy to store them on my PC. In these cases, I also create online filing areas. And, having suffered a complete computer crash or two over the years, I also periodically back up these documents on a flash drive or CD.
It doesn't matter whether you are old-school paper or all digital in your record keeping. The important thing is to have a record system and keep it up to date.
Create a financial overview
It's great that you have all those various financial documents in their proper places, online and/or in filing cabinets.
But you also need to have an overview document. Or as I like to call it, a financial cheat sheet.
This is a one-page collection of your and your family's critical fiscal data. It should include the details you probably do know about each other -- birth dates, Social Security numbers, 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 and credit card account numbers (some creditors issue each account holder a slightly different set of digits).
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, balances owed, etc.
Keep one copy with your other records and give another to a trusted friend or family member, as well as your attorney and/or financial adviser. I also put a copy in our safe deposit box.
Don't forget passwords
This financial information is especially important if something happens to you so that your partner will be able to take care of things until you're able to get back to your normal routine. For that reason, also be sure to include share your computer account passwords, as well as your security Q&As, on your financial document list or, f you prefer on a separate list.
Tend to your estate
Yes, Congress is still fighting over what the estate tax will look like. But there will be one. If your assets are enough that you might be affected, talk to an estate tax attorney and look at options to reduce any potential IRS bite.
Regardless of how much you own, you still need the basics, such as a will. You want to decide who gets what, not some judge.
So don't be like Congress and put off this critical task. You can always revise your estate documents and will later as your situation -- and federal laws -- change. But having something in place is a critical first step.
There! You and Don't Mess With Taxes' fourth annual five-part Year-end Money Moves series are done!
I know this is a lot to think about, especially during the time of year when you've got tons of holiday responsibilities to tend to, too. But even if you can't take care of it all by Dec. 31, at least get started.
Once you have a framework in place, your annual end-of-year (and throughout the year!) financial tasks will be much easier.
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