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See I told you, this would help!

Coupon Abbreviations
  • SC = Store Coupon
  • MC = Manufacturer Coupon
  • SS = Smart Source
  • RP = Red Plum
  • PG = Proctor and Gamble
Coupon Terms
  • WYB = When You Buy
  • B1G1 = Buy One Get One Free
  • .75/1 = 75 cents off one item
  • .75/3 = 75 cents off three items
  • EXP = Expiration Date

Going Nuts? I can help you understand coupon terms and abbreviations

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You were thinking that now is the time for mistletoe and holly… it may be, but it’s also the best time to be proactive with your finances and pre-tax planning.  There are some key things you can do right now to reduce your monthly expenses and your tax bill in the spring, the catch is that most of them need to be done before the end of the year!

Most of these are only going to help if you are able to itemize your deductions and not taking the standard deduction (aka. More than $6,300 for singles or $12,600 for married couples).

1.  Last Minute Donations

Now is the time to get in last minute donations to charities.  This can be money donations, but can also be items you are cleaning out and getting rid of.  With any donations make sure to get a receipt of your donation.  To get an accurate assessment for the value of your donation we use the It’sDeductible app from Turbo Tax.

2.  Review Other Deductions Now To Maximize

As I mentioned above, most tax deductions don’t apply unless you are able to itemize your taxes.  If you are on the edge of being able to itemize, here are a few things you can do to get above the standard deduction:

  • Pay any state taxes (cars, house etc.) before the end of the year.  
  • Make extra donations to Charity.
  • Take last minute Work-Related Education Courses.  As long as they are needed for your job and not paid for by your employer they are probably deductible.  

3.  Organize Medical Expenses Now

Most families are not able to itemize their medical expenses.  According to current tax law you can only deduct expenses that exceed 10% off of your Adjusted Gross Income (AGI).  For a family with an AGI $40,000 a year, that means you can only claim medical expenses over $4000.  If you had a baby this year and met your out of pocket max on insurance you may be really close to that level now.  That means… if you’ve got dental work you need, or anything else you’ve been putting off this year may be a great year to get it done.  You do need to pay for it fully in this year to be able to claim it though.

A few medical expenses that are overlooked: mileage to and from medical appointments, reading or prescription glasses or contacts, hearing aids, or the premiums on long term care insurance.  

4.  Contribute to a Traditional IRA or 401K Plan

The easiest way to pay less taxes is to save for retirement.  This also directly can help with those medical expenses, as any contribution to a Traditional IRA or 401K plan reduces your adjusted gross income.  You actually have until April 15th of next year to make these contributions, so start saving now!  

Both of these retirement plans are putting money aside tax free now, but you will be taxed on them later when you withdraw the money.  For families in higher tax brackets now, these are the best options since in theory when you retire you will have less income and be in a lower tax bracket.  However, if you are in the lowest tax bracket right now a Roth IRA might be the better option.  There are no tax breaks now, but when you pull the money out it’s entirely tax free.  

5.  Contribute to a Health Saving Account

If you have a high deductible health insurance plan, with a deductible of at least $1,300 for individuals or $2,600 for families you could be eligible for a Health Saving Account (HSA).  These are the only account that exists that lets you put money in tax-free and withdraw it tax-free!  Seriously that’s pretty awesome.  The only requirement is that you have to have the right health insurance plan and make sure that the money is only used for medical needs.  You can even put that money in stock market HSA accounts, everything it earns is tax-free!  

You can contribute up to $3,350 if you are single or $6,650 if you are married every year.  You do not have to use that money at all.  You can keep contributing each year that you have an approved health insurance plan.  Your contributions to an HSA plan also help to lower your Adjusted Gross Income, which helps you out with medical expenses too.  You have until April 15th next year to make contributions for this calendar year.

Tip: Most financial planners would encourage you to use these accounts and let the money grow.  Just pay as you normally would for medical expenses and leave this alone.  When you are older you can use it when you have a lot more medical needs.  It can even be used to pay long term care needs.

6.  Shop Around for Health Care

We are currently in the open enrollment window for health insurance.  You’ve got through 12/15 so make changes to your current plan and try to reduce the cost as much as you can.  I know for many of you there aren’t a lot of options (our family in GA only has one insurance provider working in their area so their are no options).

Depending on your current health and religion, you may be eligible for Medi-Share programs.  Most of these are Christian organizations that make you sign a statement of faith.  They count to fulfill Affordable Healthcare requirement of having insurance, though they are not true insurance.  Cost wise… these programs are 50-75% cheaper than traditional insurance!

We just made the switch cutting our monthly costs from $1240 a month for a $13,500 high deductible plan to $510 a month for a $3750 out of pocket level!  That’s a savings of $730 a month not mention if we got sick we would owe $10,000 less!  I’ve spelled out a lot more about this program here.

7.  Review Monthly Bills and Call to Renegotiate

While you can renegotiate your bills anytime of the year, the month of December is usually the most beneficial time to do it.  Cable, phone and other discretionary expenses know that they are the first to go during tight times and they see a number of people cancel accounts in December and January to try to make ends meet.  Because of high cancellation rates, they tend offer lucrative deals to retain customers.

For example, right now you can save 60% off Siruius XM to renew online, or follow a friends lead and cut your Direct TV cost in half just by calling and saying you want to cancel!  Many times your savings will be for the next 12 months too, so this is a long term savings.

8.  Make Your 2018 Budget

Thinking about money doesn’t sound fun when you are wanting to go big on Christmas presents.  This is the perfect time of the year to look at how you have done over 2017 and what your goals are for 2018.  While it may not be all good news, it will help you decide if going big for Christmas is the right thing to do, or if there is something more important you want to focus on.

There are some great apps that will help you get started if you need a push.  Check out Mint, YNAB, or Every Dollar.  These will help you organize expenses into categories and some will even give you reports of how you’ve done month over month.

9.  Set Up Automated Savings for 2018

Ever have a “I should really do that” moment?  This should be one of those for all of us.  We need to stop what we are doing and set up an automated deposit to your savings account right now every month.

One tip I highly recommend is that your savings account be at an online bank.  We use Capital One and this makes it slightly harder to dip into savings for simple splurges.  The money is still there and all mine, but it takes 2-3 business days to get it out of savings and that saves you from not respecting it they way you should.  (If you use this link with Capital One you’ll get a $25 bonus in your savings account).  Online accounts also tend to have higher interest rates than local banks.

10.  Christmas Cleaning & Selling

Before you unwrap all the new toys (for you and the kids) how about taking the weekend to clean out things you don’t need.  Go big and put them on eBay or even Amazon Marketplace (it’s every easy to get started selling through their app) and make some extra money on items rather than just donating everything.  You’ll be surprised what you can sell including old electronics, shoes, toys, sporting equipment… It’’s really up to you, how much you are willing to part with?

    • Will C.

      Don’t forget contributions to Section 529 plans. Contributions are fully deductible for state income taxes. Additionally, the republican tax plan has provisions that may possibly allow k-12 expenses at private schools to qualify as a qualified expense for distributions from these plans.