Fall Financial Clean-Up

Tax Tips and Debt Advice To Round Out The Year

Fall Financial Clean-Up
September 24, 2015

With summer ending, the end of the year will be around before you have time to figure out whether it is better to finally take down the Christmas lights or, at this point, just leave them up. That makes it a good time to look ahead on your taxes, as well as a few other financial chores.

The first step is to check your taxes, to make sure that you are not giving Uncle Sam a tax-free loan until next April 15. On the other hand, if you use your tax refund as a kind of payroll savings plan to pay off holiday bills or finance your next vacation, make sure that your refund amount is on track.

Click over to the IRS website and search for “withholding calculator.” You will need your latest paycheck stub (as well as your spouse’s, if filing jointly) and a copy of last year’s return. Use that as a guide for estimating your deductions, but make adjustments if something big has changed in your financial life. If, for example, you have refinanced your home to a lower-rate mortgage, you will have less interest to deduct.

In general, experts recommend aiming to get or owe about $100. When you are done, the calculator tells you exactly how to fill out a new Form W-4.

Speaking of taxes, if you sent Junior or Missy to day camp or some other kind of care after school let out, gather those receipts, too, because that expense is deductible under the child and dependent care credit, if it allowed you or your spouse to work. (Sleep-away camp is not eligible, probably because the IRS figures getting the kid out of the house is all the reward that parents need.)

The deduction is capped at $3,000 for one child, $6,000 for two or more, and you can write-off from 35 percent to 20 percent, depending on your income level. There is one catch: you need to provide a tax ID number for the camp provider, so that rules out the kid down the street you paid in cash. If you have other daycare costs, which were also incurred so that you could work, you can include those expenses under this deduction, too.

If your company offers a child-care flexible spending account, which allows you to avoid paying income tax on money you use to pay for childcare, you can apply that, too. You cannot use your flex money to pay for services you deduct under the child-care credit, so max the credit out first. If you are in a tax bracket of 25 percent or more, use up your flex allowance first (up to $5,000/joint or $2,500/single a year), then the care credit.

One caveat: these tax breaks apply only to those 12 and younger because the IRS feels any kid 13 or older is completely trustworthy and independent.

Another end-of-summer chore that can pay off is to go through the junk mail that has piled up. Chances are that if you have a decent credit score, you are getting very nice offers from credit card issuers, with as much as 18 months of 0 percent interest. Fees can be as high as 5 percent of the balance you transfer, but deals can be found charging just 3 percent. This is a good move to make now, before interest rates rise.

If you transfer other debt, cut up that card or lock up those home equity checks – you will only end up running up the balance on the old account while making the new lower-interest payments, too, which gets mired in even more debt. If you can, automate the payments to the new card to take full advantage of your 0 percent rate until your debt is retired.

Finally, put a note in your calendar for Black Friday. The day after Thanksgiving is not only a great day for holiday shopping sales, but also a good time to revisit your tax situation before New Year’s rolls around.


Photo ©iStock.com/CatLane

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Sarah | 09.24.15 @ 14:14
Good ideas.
Erin | 09.24.15 @ 14:16
I never knew day camps were eligible for deductions. Looks like I need to add another thing to the calendar to make sure we're on track.
Angie | 09.24.15 @ 14:18
Are there any anticipated tax changes for tax year 2015, I wonder?
Elaine | 09.24.15 @ 14:18
Sorry to say that it is way too early for me to think about taxes. Great tips but I'm sure I will not be using them.
Steffanie | 09.24.15 @ 14:19
Great information and will definitely be keeping it in mind.
Daniel Dohlstrom | 09.24.15 @ 14:20
Good tips to keep in mind as the year winds down
Zanna | 09.24.15 @ 14:34
I'm not ready for it to be this close to the end of the year. Time to dig out folders and dig into planning.
Beverly | 09.24.15 @ 14:34
Some good tips...... Although the last one is only beneficial if are going to do what it says and don't rack up debt on the old card.
Ron | 09.24.15 @ 14:36
Oddly enough, I tend to mess with more 401k and stock items near the end of the year while ignoring what I did the rest of the year. One day, I will learn to not be so myopic and use a big picture viewfinder to gaze in.
Britt | 09.24.15 @ 14:44
Autumn usually tends to be the time of the year that I start saving the most so that I am well-prepared for christmas.
Tina | 09.24.15 @ 14:44
Good tips. I usually gather everything in January - there is always some form someone owes me that pushes that January 31 deadline to the max. Then I file in February and am done with it.
Wanda Langley | 09.24.15 @ 14:46
Great information to know ahead of time.
Christina | 09.24.15 @ 14:50
I've always felt like September was a better time to make "New Year's resolutions" for some reason. Time to add 'financial check-up to my list!
Jo Ann | 09.24.15 @ 14:52
Interesting deductions, especially the flex child care accounts, and the child care credit. I didn't realize that both could be used.
Meredith L | 09.24.15 @ 14:54
I've played the credit card game before. You have to be careful with all of those offers because if you have too much rotating debt, it could harm your chances for a loan later on. That being said, there are some good ideas here.
trish | 09.24.15 @ 14:55
Great ideas. Will definitely do some of these suggestions!
Stokes | 09.24.15 @ 15:03
I didn't know day camp is deductible. I wish I had know this last year.
gracie | 09.24.15 @ 15:04
Some great thoughts here on getting taxes and shopping organized as we head into the holiday season!
Heather | 09.24.15 @ 15:04
We always start getting ready for taxes with a couple months to go in the year. We always make sure to get our charitable donations in now.
Clarissa | 09.24.15 @ 15:05
I do not understand all that comes with doing my taxes. But this article provides some good insight and tips. I'm glad I'll be able to refer back to this article come tax time.
Selena Walls | 09.24.15 @ 15:25
Lots if information here I did not know at all.
Kathryn | 09.24.15 @ 15:27
This is awesome and I love these tips! I will be sure to use them this coming January!
Rychana Vingia | 09.24.15 @ 15:28
These are great tips. I didn't know about some of this.
Nancy | 09.24.15 @ 15:28
These are some good tips. I never knew about the IRS withholding calculator. I will be using that.
Sara | 09.24.15 @ 15:33
Did not know about some of these. Man its almost tax season again...
Christina | 09.24.15 @ 15:42
Good information to keep in mind.
George Middleton | 09.24.15 @ 15:46
Will be checking out the IRS calculator. Good info...
Alec | 09.24.15 @ 16:04
I'm not eligible for any of the deductions listed and thankfully our debt is at a minimum but I will be getting married next month. I'm sure that'll make a huge difference in our tax returns one way or another.
Kelley | 09.24.15 @ 16:05
We used to deduct my daughter's summer day camp from our taxes. Because it was either that, or sending her to daycare, and day camp through the park district was way cheaper.
Kamie | 09.24.15 @ 16:10
There are a lot of things that are able to be deducted and I never knew they could.
Bobbie | 09.24.15 @ 16:21
So far so good, but the change in our tax situation as the kiddos got older was a bit of a eye opener. Love this line: tax breaks apply only to those 12 and younger because the IRS feels any kid 13 or older is completely trustworthy and independent. *snicker*
Kaila | 09.24.15 @ 16:40
Interesting tips I will have to try to remember the ones for kids when I have kids.
Chelsey | 09.24.15 @ 16:55
I have always disliked the fact that paying for private school for my kids has never been any sort of deduction.
Irene | 09.24.15 @ 16:55
I love tax refund season,
Morgan | 09.24.15 @ 16:57
Autumn is by far my favorite season. I always manage to save more money during this time of the year.
Amanda | 09.25.15 @ 21:52
I look forward to tax time because I always get a return.
$commenter.renderDisplayableName() | 12.10.16 @ 03:28
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