Even personal finance columnists occasionally put off tasks on their financial to-do lists. But tax time provides an excellent opportunity to get back on track. I finished pawing through my shoebox of documents and receipts to meet the April 15 deadline and now have a better sense of my family's financial picture.
If you haven't filed yet, can't file before Thursday or can't afford to pay, the worst thing you can do is cross your fingers and hope the IRS doesn't notice. Because of the economic downturn, Uncle Sam says he's being more understanding. For help, call 1-800-829-1040 or visit www.IRS.gov to find the closest IRS office.
Here's what I'm working through in the next month or two:
•Rejigger my tax withholding calculator. As for many of you, pay and benefit cuts have altered my family's financial picture. Plus we had another kid in 2009. We received a tax refund for the first time in years. While it was a pleasant surprise, I'd rather not receive a sizable refund because I'd like to put that money to use throughout the year. So with tax forms and pay stubs handy, I'm going to recalculate my tax withholding. Many tax software programs offer withholding calculators, as does www.IRS.gov. If you find you're letting the IRS take too much or too little from your paycheck, file a new W-4 with your employer.
•Make my 2009 contribution to a Roth IRA. You have until April 15 to make a contribution to an IRA or Roth IRA for 2009. Normally, I invest several hundred dollars into this account per month, so I spread out my $5,000 investment over 12 months. But when the economy took a dive, I got nervous and focused on hitting our emergency savings goal of having six months of living expenses in a cash account. Now that the cash cushion is fluffy, I'm giving my Roth the attention it's due.
• Request a free credit report (and not from www.freecreditreport.com). You are entitled to one free credit report from each of the three major credit bureaus yearly. Make a request once every four months and you just fashioned yourself a free credit monitoring service. Because many consumers were duped into paying for a so-called "free" credit report from sites that sold them credit scores or automatically enrolled consumers in costly credit monitoring services, the Federal Trade Commission is now requiring such sites to clearly disclose that the only authorized source for a free credit report is through www. annualcreditreport.com or by calling 877-322-8228. Learn more about the new disclosure rules at www.ftc.gov/freereports.
•Peek at my retirement portfolio. If you've been afraid to look at your retirement savings, you may be pleasantly surprised. My mix of stocks and bonds was up 7.2 percent this quarter and has come a long way since the Dow hit bottom in March 2009. One of my accounts automatically rebalances twice a year, selling my winners at high prices to buy underperforming assets at low prices. The account that doesn't automatically rebalance was really out of whack. Now's the time to make sure that your investment mix is in balance and you're still on track to meet your retirement goals. Don't just guess. Recalculate using a calculator provided by your workplace plan, head online to a site like dinkytown.net, or talk to a financial planner.
•Shop around ... again. It's a hassle and I'm loath to do it, but it pays to reevaluate your cable package, cell phone plans and insurance policies yearly. Our cell phone provider just came out with a plan that'll significantly reduce our monthly costs. As I haven't shopped for home insurance since we refinanced years ago (you know what they say about the shoemaker's kids -- personal finance columnists are no different), I have no idea if we have the correct level of coverage and if the premium price is right.
For more ideas on sprucing up your finances, work through New York Times columnist Ron Lieber's checklist of 31 money tasks or the financial recipes that Kiplinger's Personal Finance Magazine cooked up for readers. Thanks to Kiplinger's list, I'm going to copy the contents of my wallet so I have credit card numbers and contact info handy in case a thief takes off with my purse. Lieber's list pushed me to add "revise the will to include the 1-year-old" on our to-do list.
Kara McGuire • 612-673-7293 or kmcguire@startribune.com
