The New Year has begun and it is a time when people all over the world set goals or resolutions for themselves. Lots of people join gyms or decide to start a new diet, but in addition to resolutions that are good for your health, I think it is a good idea go with a few that are good for your wallet. Here are my favorite tax and finance savvy New Years resolutions.
Don't Wait until April to Think About Taxes
Most Americans wait until March or April to start worrying about their taxes. However, I recommend making a short term goal to start working on your tax return this month, and try to get it filed some time in February. That way you can get your refund nice and early, and also avoid crowded tax preparation offices if you are going to seek professional help for your return.
Stay on Top of your Tax Planning
You shouldn't let the whole year go by without thinking about taxes again. By staying on top of your tax planning throughout the year then you can help keep your liability as low as possible. Also, you can prevent being faced with an unexpected tax bill next April.
Give More of your Time to Charity
In addition to donating your unwanted household items, which all will result in a tax deduction, why not give more of your time to charity this year? Since the recession began many nonprofit organizations have been struggling, and by spending a few hours volunteering won't cost you anything out of pocket. Additionally, if you do have to purchase supplies, or drive while volunteering then you can deduct these expenses.
Don't Rely on Credit
Cutting back on credit cards is always a good New Years resolution. In fact, in 2010 fewer Americans used credit then in years prior. Now is a great time to jump in on the trend. Instead of relying on credit try to make a strict budget and use your ATM card instead of your Visa or MasterCard.
Live a Greener Year
These days there are plenty of incentives to living a greener life. In addition to helping the planet you may also be able to qualify for a federal tax credit. For more information on which purchases qualify, check out EnergyStar.gov.
Start Planning for your Retirement
It is never too early to start planning for your retirement. If you do not already have an account, then make it a resolution to start an IRA or 401(k) in 2010. If you already do have a retirement account, then you could make it a goal to max out on your contributions.
Save for a Rainy Day
These days many Americans are struggling to pay their bills. However, if you can afford to do it, then try to begin setting aside money from each of your paychecks. You never know when a rainy day will hit, and you will be better equipped to deal with it if you have a little extra money set aside.