The presents are opened, the paper discarded and the leftovers are in the fridge. You know what that means: Just a few more days to make some year-end financial moves. Sounds tedious, but making them will help you improve your security against identity theft and give you a better picture of your financial health.
No one of them should take long — you can probably knock them out during the commercial breaks of your favorite TV shows.
1. Change passwords
Make a point to update all your passwords for next year, especially those for bank, credit card and other sensitive accounts.
You could use a notebook and pen to record your new passwords, but a much better idea is using one of the numerous free password manager programs available. Most will generate and store strong passwords for you. You only have to remember one. See our articles “A Simple Way to Make Hackers’ Lives Harder and Yours Easier,” and “Five Password Managers to Keep All Your Secrets Safe.”
2. Request a free credit report
Another quick and easy money move is to get your free annual credit report. Federal law entitles you to one free credit report from each of the three major reporting agencies every year. Download one during a commercial break and review it for mistakes or suspicious activity.
Make sure you are requesting your reports from AnnualCreditReport.com, which is the only website authorized under the law to provide free credit reports. Other websites might send you reports, but there’s usually a catch. For example, the site might automatically enroll you in a credit monitoring service or some other subscription program. (See: “How to Get Your Free Credit Report in 6 Easy Steps.”)
3. Review your FSA balance
A rule enacted in 2013 permits employers to let flexible spending account participants roll over up to $500 to the next year.
Note, however, that employers aren’t required to offer a grace period or a rollover. So now’s the time to find out your employer’s policy. If they’re not participating in either option, use a commercial break to go shopping. Spend that money on qualified expenses by doing things like refilling prescriptions or maybe buying new glasses.
4. Complete an investment review
Sound time-consuming? Not really. You can do an investment review in 15 minutes or less with these steps. In a nutshell, you want to check your investment performance, review your fees, and reallocate balances if needed.
While looking over and understanding your investments may seem boring, it’s exciting compared with the commercials you’ll be missing.
5. Sell losses to offset gains
While you have your investments in front of you, look for losers and consider unloading them. Selling a stock or other security at a loss can offset investment gains you’ve taken during the year, thus lowering your tax bill.
If you don’t have gains, losses can also be used against up to $3,000 of your regular income. Net losses exceeding $3,000 will be carried over to future years.
Losses in tax-advantaged retirement accounts, like an IRA or 401(k), aren’t deductible.
You can’t game the system by selling a stock at a loss, then buying it back a few minutes or days later. For an investment loss to be deductible, you can’t purchase a substantially identical security within 30 days before or after a sale.
Confused? Check out “Sales and Trades of Investment Property” from the IRS. Warning: As with all IRS publications, it’s going to take more than one commercial break to understand.