No time like the present to tidy up your finances; Read a checklist and start acting prudently; Time and money; Dollars & Sense


Use what's left of the fall to think carefully about your year-end finances. Some tasks can't wait until the new year. And if you do wait, you could miss out on some great financial savings. Here's a checklist to get you started:

Check out flexible-spending arrangements:

These accounts, offered by some employers, allow workers to use pretax dollars to cover medical expenses and dependent-care costs.

Employees determine how much money to contribute to the account, based on their expected expenses during the plan year. The higher the contribution, the lower the taxable pay. But be careful. If you don't spend all of the money you've set aside, you don't get what's left. If you over-contributed this year, lower your contribution for next year.

Be aware of the "wash sale" rule:

With all of the ups and downs investors have seen in the stock market lately, some investors will opt to sell stocks at the end of the year for tax-loss purposes. Just remember that the Internal Revenue Service doesn't allow the deduction of a loss for a security sale if you buy that same security back within 30 days. As long as you wait 31 days or more, there's no problem and you'll avoid the "wash sale" rule.

Paper-proof yourself against possible Y2K glitches:

While experts don't expect any major problems with the date change, many consumers are a bit nervous about the arrival of year 2000. To protect yourself, financial experts suggest keeping printed copies of all financial documents, such as bank statements, 401(k) statements, mortgage and car payments, credit-card bills and insurance statements. Perhaps keep all statements dated Sept. 30 through the end of the year. That way, you'll have a record to take to your bank or creditor should any mix-ups occur.

Update your beneficiaries:

Review exactly who's listed. Sometimes, a beneficiary you named a decade ago has died. Or perhaps you haven't named any beneficiaries. Review your beneficiaries on your life insurance policy, 401(k) or other qualified plan, variable annuity and individual retirement account.

Check your retirement distributions:

When you reach age 70 1/2, you are required to start taking distributions from your IRAs and qualified plans. You need to do this before the end of the year. Don't incur a 50 percent penalty. For example, if you have a $200,000 IRA and you need to draw out one-sixteenth of that ($12,500), and don't -- you'll be socked with a $6,250 penalty.

Time your mutual fund sales:

Don't buy yourself a tax headache. If you plan to purchase a mutual fund at the end of the year, try to do it after the dividend is paid out. If you buy just before the dividend date, you'll get back part of the money you just invested -- and have to pay tax on it.

Remember to fully fund your 401(k).

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