March’s Financial To-Dos

March’s Financial To-Dos

Inspired by Morningstar’s Financial To-Do List, we’re offering a few tasks each month for tackling what can seem like an overwhelming project: getting or keeping your financial house in order.

By focusing on just a few tasks at a time, a seemingly impossible battle can be won. Choose one or more of the following things to get done this month.

Create a personal possessions inventory

With spring storms just around the corner, now is a good time to create or update a list of your personal possessions. Fewer than 20% of Americans have such a list. If disaster hits, insurers will want details that may be hard to create after the fact. A simple inventory can be created by building a list of key items with make, models, serial numbers, and approximate purchase price. Another easy way to start this is to take out your smartphone and just make a video tour of your belongings. There are also a number of apps that can help you get started.

Contribute to IRAs by April 15

Taxpayers have until the tax filing deadline (usually April 15) to fund personal retirement accounts for the previous year. Those who are eligible can contribute up to $6,000 into either an IRA or a Roth IRA (as of 2020). The contribution limit increases to $7,000 for those age 50 and over. Right now, the “backdoor Roth” strategy is still open for high income earners, enabling Roth contributions to those who wouldn’t normally qualify.

Eligibility for retirement contributions can be tricky; this is based on income and other retirement plans available (such as a 401k), so check with a tax professional first.

Fund HSAs by April 15

If you have one, Health Savings Accounts are one of the greatest tax reduction strategies available. HSA contributions are tax deductible going in — and they are also tax free upon distribution if used for qualified medical expenses.

If your taxes are higher than expected for last year, you also have until filing your taxes to fund your HSA for the previous year. Individuals who had a High Deductible Health Plan for all of 2019 can contribute up to $3,500 for last year. Family coverage pushes that limit up to $7,000. Those age 55 and above can also contribute an extra $1,000 ($4,500 for individual or $8,000 family).

This limit includes anything you or your employer contributed for the year, so make sure all deposits are counted correctly.

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