10 things to do to get ready for 2012

This time of the year, it’s easy to get lost in the hustle and bustle of the season. Last minute shopping to finish out your gift list and getting ready for the holidays take almost all your energy and attention. But this is the best time to make sure that you take care of several important chores before the big crystal ball drops and the calendar switches from 2011 to 2012.

To help you make sure nothing falls through the cracks, we’ve put together the following end of year checklist to make sure you are prepared for the new year:

  1. Make charitable contributions: you may be able to deduct charitable contributions from your taxes for this year if you itemize. Make a rough estimate of your income and other deuctions for the year so you will know if your charitable deductions will be phased out because you earn too much. The 2010 publication from the IRS about charitable contributions can be found here.
  2. Take advantage of your health insurance deductible: many health insurance “plan years” are on a calendar basis. If yours is and you have already met your deductible, then you will want to go ahead and make the appointments with your healthcare providers you have been putting off. If you haven’t already met your deductible, then you may want to schedule those for after the new year so that they can apply to next year’s deductible. Of course, you should never put off anything other than routine doctor’s visits – don’t sacrifice your health for the sake of an insurance deductible!
  3. Complete your FSA spending: Flexible Spending Accounts (FSA’s) are “use it or lose it”. Therefore, you don’t want to end the year with unspent money in that account. If your health insurance plan year is on a calendar basis, then so is your FSA. If that’s the case, then add up all the receipts that qualify for reimbursement under your FSA. If you have not yet met your FSA total, then make purchases of the items you need that are eligible for reimbursement through your FSA (the list from the IRS for 2010 can be found here.)
  4. Update your will: Hardly anyone likes to think about dying, but it’s wise to prepare for that day by having an up-to-date will in place. If you don’t have a will, draw one up. If you do have one, review it to see if your life situation has changed in such a way that requires you to update your it. In it, make sure you name an executor and, if you have children, designate trustees and guardians.
  5. Plan taxes: In addition to the charitable contribution planning described in step 1, perform other tax planning. If you itemize and your deductions are not phased out because you earn too much, you may be able to deduct things like your property taxes which often are due by January 31. If that’s the case for you, then you can decide whether you’re better off making those payments before the end of the year so you can deduct them on your 2011 taxes, or after the first of the year so you can deduct them on your 2012 taxes.
  6. Asset review: Go through all your valuable assets and make sure your documentation for them is up-to-date. The kind of information you should keep for your assets includes purchase receipts, model and serial numbers, and photos or videos of the assets.
  7. Insurance update: as you buy things, or are given them as gifts, it’s easy to foget to add them to your insurance policies. It’s also hard to remember to periodically review your insurance policies to make sure you have adequate coverage for all the things you own. Once you’ve done the review described in step 6, you should go through all your insurance policies to review your coverage.
  8. Health planning: get a jumpstart on your new year’s resolutions by evaluating your current health and setting goals for 2012 for yourself. Think about any changes that have happened in the last year to you or your relatives so you can update your health history and inform your doctor. For example, if a blood relative was recently diagnosed with diabetes, you now have an increased risk factor for diabetes, and you should make a note to inform your doctor about that.
  9. Physical: the old addage that an ounce of prevention is worth a pound of cure is definitely worth remembering — schedule your annual physical.
  10. Household chores: so that you can easily change your a/c and heater air filter every month, it’s helpful to go ahead and buy 12 of them so that you have them ready and available. That increases the likelihood that you’ll actually do it. If you have a battery-operated smoke detector, check its batteries.