Financial tasks in the early year can significantly impact your financial health. Here are three critical actions to consider:

Avoid Tax Penalties

Recent tax rule changes have caught many people off guard. Notable changes include:

• Elimination of personal exemptions
• $10,000 limit on state, local, and property tax deductions combined
• Potential penalties for insufficient tax withholding

To avoid penalties, ensure your 2018 withholding meets one of these conditions:

• Equals your total tax from the previous year
• Equals 110% of previous year's tax if your AGI exceeds $150,000

If you've under-withheld, make an estimated tax payment by January 15 to avoid penalties.

Front-Load Medical Expenses

Early-year medical appointments offer multiple benefits:

• Early detection of potential health issues
• Maximum value from insurance deductibles
• Better utilization of out-of-pocket maximums
• Optimal use of Flexible Spending Accounts (FSAs)

FSA tip: You can claim up to your annual contribution limit ($2,700 in 2019) before fully funding the account through payroll deductions.

Organize Savings Buckets

Create dedicated savings accounts for specific purposes:

• Vacations
• Property taxes
• Insurance premiums
• Car repairs
• Emergency funds

Benefits of savings buckets:

• Prevents credit card debt
• Ensures funds availability when needed
• Helps track specific financial goals
• Reduces financial stress

Consider using online banks that offer:

• Multiple labeled sub-accounts
• No monthly fees
• No minimum balance requirements

Review and adjust saving amounts annually to account for changing costs and circumstances. Regular maintenance of these financial tasks can lead to significant savings and reduced stress throughout the year.

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