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4 end-of-the-year must-dos

By Jennie L. Phipps ·
Sunday, September 16, 2012
Posted: 6 am ET

Now's the time to get started on your end-of-the-year to-do list, particularly if your retirement planning includes leaving full-time employment in 2013. Here are four things that should be at the top of your list.

Review your Medicare plan. Medicare open enrollment, the period during which you can switch your plan, is shorter this year, opening Oct. 15 and ending Dec. 7. It is particularly smart to look at your prescription drug Part D plan, especially if your doctor has added or subtracted medicines. You might be able to save yourself big money.

Analyze your investment portfolio. The current long-term capital gains rate for people in the 10 percent and 15 percent tax brackets is zero. Taxpayers in the 25 percent and above tax brackets pay 15 percent. Starting Jan. 1, the long-term capital gains rate rises to 10 percent for those in the lowest two tax brackets and 20 percent for everyone else. If you have to sell stocks this year or next in order to pay the bills in retirement, selling this year might be the right choice. Now's the right time to get expert advice.

Review your will. Federal estate taxes were zero in 2010. This year, they are at 35 percent with a $5.12 million exclusion. On Jan. 1, the exclusion drops to $1 million and the tax rises to 55 percent. You don't have to be a zillionaire to leave a $1 million estate. In many parts of the country, a relatively modest home can be worth $1 million. Consider some strategies for sidestepping the problem so you don't leave your family with a big headache.

Consider your medical expenses. Starting next year, your out-of-pocket medical expenses must exceed 10 percent of your adjusted gross income in order to be deductible from your taxes. That's up from 7.5 percent this year. Also, the amount you can save in a tax-advantaged flexible spending account will be capped at $2,500. If you are going to get some dental work or your tummy tucked, do it this year instead of next.

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1 Comment
September 17, 2012 at 3:31 pm

Guess we just get hammered no matter what...we have no say or choice in any of the above matters as far as taxation. My biggest peeve...FEDERAL ESTATE TAXES...Good grief...if a person works hard, so they can afford to leave properties, cash, etc., etc. Who the bleep does the federal government think they are??
Taking 55% now.
Shouldn't this be illegal? Like taxation without any representation? If we've been represented and this is the outcome...better vote 'em all out!
I've been checking every angle there is, and then some, for over a year now...think I've finally figured out a way for my kid to keep everything of mine, when I die...and the government, nobody...can touch a penny of it, nor tax it, either.
Thank you, but don't think I'll share my strategy. Would like to help others, but I'm sure once the government figures out how relatively easy it is to accomplish, and lots of others start doing the same thing...Guess What? Then the government will find a way to tax it.
The government does nothing for us..."Oh...we didn't build that"? Really?, they might as well add "Oh, and if you did...we'll try to take every penny of it that we can, after you die"