January Money Management |
JANUARY 7, 2008
YOUR TOP FINANCIAL RESOLUTION
What’s the best financial resolution to make in 2008? Reducing outstanding high-interest-rate credit card debt should be a top priority, according to the Georgia Society of CPAs. Paying high interest rates uses up cash you could be using for more worthwhile outlays.
To achieve this goal, cut back on spending so that you have more cash for credit card bill payments. If you don’t think this step will make a big enough dent in what you owe, look to transfer your debt to a lower-rate credit card. It might also be possible to negotiate with your current credit card company for a better interest rate. Your CPA can advise you on ways to tackle high credit card debt and on other tough financial planning topics.
JANUARY 14, 2008
ACHIEVING YOUR FINANCIAL GOALS
Would you like to pay off some high-interest debt? Step up your retirement savings? Set aside enough for an exciting vacation? To achieve these goals, the Georgia Society of CPAs recommends that you begin by creating a budget. It should cover both what you earn each month and what you spend. If you don’t know how much you’re spending, keep track of your outlays for a month to get an accurate idea. Your budget will tell you how much you can save monthly to reach your financial goals. The next step is to make sure your spare cash gets invested with a bank or another financial institution. You can do that by setting up an automatic savings plan with your financial institution or enroll in a 401(k) plan your employer.
For expert help in creating a budget or setting up a savings plan, contact your CPA. He or she can explain the options and set you on the path to meet your financial goals.
JANUARY 21, 2008
NEW RULES ON CHARITABLE DONATIONS
Helping a good cause is a reward in itself, but it’s also gratifying to get a tax benefit for our contribution. But when you give to a charity, you should be aware of changes in the tax law that has recently been enacted, advises the Georgia Society of CPAs.
In general, you are allowed to deduct the value of your donations to a qualified tax-exempt organization, such as a religious, charitable, educational or other philanthropic organization approved by the IRS to receive deductible contributions. Under the new rules, if you donate clothing or household items, the property must be in good condition or better. If you give monetary gifts, your documentation can be a bank, credit union or credit card statement, cancelled check or a written receipt from the charity showing the donation amount and date. If you give clothing or a household item, you will need something in writing from the charity confirming the organization’s name, what you have donated and the date of the donation. Without these records, you won’t qualify for a deduction for your donation.
Need help understanding the new rules? Your CPA can provide advice on the best way to be sure you qualify to take the deductions for your donations.
JANUARY 28, 2008
TAX-SAVVY RETIREMENT PLANNING
The Georgia Society of CPAs advises that the employer match--a feature of many companies’ 401(k) plans--is a great opportunity to expand your nest egg. As a benefit to employees, many employers will deposit a certain amount into your retirement plan account based on your own contributions. This employer deposit essentially amounts to a tax-free bonus, so it’s well worth contributing enough to your account to make the most of the match. The funds you and your employer invest will grow tax-free until distributions are made—-at a time when you’ll likely be in a lower income tax bracket. Distributions made before age 59 1/2.
Employers are increasingly shifting the responsibility for retirement savings to the employee. That means you must take an active role in planning—and saving—for your own retirement. Turn to your CPAs for advice on making smart choices for your future.
For more information contact Calvin Wong at 404-231-8676, Opt. 5.