6 Things to Do With Your Money Before 2014


As we approach the end of 2013, there are several steps you can take to save on taxes. It’s important to get organized so you can be sure you are taking all of the tax deductions to which you are entitled. And it’s never too late to review your rate of withholding and estimated taxes to be sure you won’t have any unwanted surprises on April 15. If you have under-withheld, you will have a few months to save the money you will owe on tax day.

Let’s take a look at a few ways you can maximize your tax savings before the end of the year.

1. Retirement Plans

Be sure you are maximizing contributions to your retirement plans. For 2013, you can make a tax deductible contribution to your 401(k) plan of up to $17,500 plus another $5,500 as a catch-up contribution. If you are self-employed, be sure to maximize contributions to your Simplified Employee Pension (SEP) or your Simple IRA plan. If you don’t have access to a retirement plan, you may be eligible to contribute up to $5,500 in an IRA with an additional catch-up contribution of $1,000 if you are 50 or over.

2. Charitable Donations

Another great way to reduce your tax bill is to make charitable contributions. The most painless way to contribute is by donating stuff that you no longer need. We all have closets full of clothes, books, toys and junk that we no longer need. If you itemize your tax return, you can deduct the fair market value of the items you are donating from your taxes. Many nonprofits, including the Salvation Army and the Goodwill, provide donation guides to help you access the value of your donations. The items must be given to a qualified charity and you need to get a receipt. Keep detailed records of everything you donate.

If you are planning to make cash donations, donate appreciated stock rather than cash. You can get a tax deduction and avoid paying capital gains tax on your donation. As long as you make a contribution to a qualified charitable organization, they will not have to pay taxes on the appreciated stock. Additionally, if you are over 70 and 1/2, you have the option to donate your Required Minimum Distribution to a qualified charity and avoid paying regular income tax on the distribution.

3. Giving Gifts

The end of the year is also a good time to consider making gifts to family. For 2013, you can contribute up to $14,000 per person per year without impacting your total estate tax exemption of $5,000,000. I realize that most of us are not concerned about exceeding the $5,000,000 estate tax exemption however; you still may want to make gifts to your children. You can minimize your capital gains taxes by gifting appreciated stock. If your children are in the 10% or 15% tax bracket, their long-term capital gains rate is 0%.

4. Losses on Stocks

This is also a good time to harvest any tax losses you may have on poor performing stocks or stock mutual funds. When rebalancing your portfolio, try to offset securities that have a gain with securities that are carrying a loss. However, don’t let the opportunity to take a tax loss drive the decision to sell a particular stock mutual fund that you would have otherwise held on to.

5. College Savings Plans

If you want to help your children or grandchildren save for college, consider opening a 529 College Savings Plan. Many states allow you to deduct contributions to your state’s 529 plan on your state income tax return. In addition to the state income tax deduction, contributions made to a 529 grow tax-free as long as they are used for qualified education expenses.

6. Self-Employed? Time Your Income Right

If you are self-employed, you may have some control over when you receive income or when you pay expenses. Manage the timing of your income to minimize your taxes. Do some tax planning to avoid huge income swings that could push you into a higher income tax bracket.

Many people, especially those self-employed, leave a lot of tax deductions on the table. Keep good records of your business, charitable and medical expenses. You should also be sure to track your business, charitable and medical related mileage.

More from Credit.com


View Comments (2)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • Accomplish your career goals

    At Capella University, you can learn the skills you need to succeed. Why wait another day? Get started today.

    AdChoicesCapella UniversitySponsored
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • 1 Tip To Lose Belly Fat

    It's Hollywood's Hottest Diet And Gets Rid Of Stubborn Fat Areas Like Nothing Else.

  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • Play

    What the Fed Meeting Means for Bonds

    Janet Yellen & Co. are expected to hint at their timetable for raising interest rates. Here's how investors should prepare ahead of the meeting.

    WSJ Live
  • Norwich Information Security MS

    Online, accredited, top ranked. NSA Center of Academic Excellence. Recognized by the Department of Homeland Security. Download your free brochure!

    AdChoicesNorwich UniversitySponsored
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Embraer to sell 50 E-175 jets to Republic in $2.1 billion deal

    Brazil's Embraer SA, the world's third largest commercial planemaker, said on Wednesday it booked a firm order from U.S. The deal, which will be included in Embraer's order book for the third quarter, is valued at $2.1 billion, the planemaker said in a securities filing. The planes will be operated…

  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider
  • Don't buy Alibaba stock: 'Dean of Valuation'

    Investors should steer clear of Alibaba , valuation expert Aswath Damodaran said Wednesday. On CNBC's " Fast Money ," Damodaran, a professor of finance at New York University's Stern School of Business, noted that he was looking at Alibaba stock from the perspective of a long-term investor, not a…

  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • Master's Degree in Nursing

    CCNE accredited MS in nursing in as few as 18 months online. Learn more today!

    AdChoicesNorwich UniversitySponsored
  • 6 Things Debt Collectors Wish You Knew

    The work debt collectors do is not popular, and has become increasingly derided by those who don’t like what we do or simply don’t know the facts about debt collection. Too often, debt collection is painted with a broad brush to create a portrait that isn’t accurate, and doesn’t properly educate…