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New year good time to evaluate finances
Eugenia Foster of Eugenia Foster CPA in Cumming works on filing customer taxes. Professionals encourage residents to prepare finances for the future at the start of the new year. - photo by Autumn McBride

Whether filing taxes or reviewing investments, a new year is the time to start preparing and making adjustments to personal finances.

“New year’s goals — make it one of the resolutions,” Robin Grier said. “In some cases, it’s too late to do anything about 2010.
But you want to make sure that it doesn’t happen again in 2011.”

Grier, who runs Robin Grier Financial Services in Cumming, said while planning can take place throughout the year, January is a great time for residents to take inventory and “evaluate what they have.”

“And if they don’t have a plan in place for retirement, they need to meet with somebody,” she said. “Because retirement doesn’t just happen, it takes planning.”

For those with a retirement plan, January is an ideal time to contribute any additional money, said Erin Carper of Carper Wealth Management in south Forsyth.

“You can make your Roth and IRA contributions up until your tax filing,” she said. “And you now know what you’ve made in 2010, so you can strategize what may be the best contribution for you.”

Carper also said the recent tax break extension for all income brackets will be a much-appreciated benefit to taxpayers.

However, the federal government also approved reinstatement for other breaks, which can cause a delay in the process for individuals claiming those deductions.

The Internal Revenue Service is asking taxpayers who itemize deductions on a 1040 Schedule A form to wait until mid- to late February to file their returns. These deductions include mortgage interest, charitable donations, state and local taxes, and medical and dental expenses.

Taxpayers claiming higher education and fee deductions or the educator expense deduction are also asked to wait until later next month.

The good news is filers have an extra three days to submit their tax returns, which are normally due April 15.

Taxpayers will have until April 18 to file their 2010 tax returns because Emancipation Day, a holiday observed in Washington, D.C., falls on April 15.

Taxpayers seeking an extension will have until Oct. 17 to file their 2010 tax returns.

Eugenia Foster said there were no major changes in the tax code from last year, although energy credits for those who have made environmentally friendly changes to their home or business could be a popular credit this year.

Foster, who is with Eugenia Foster CPA in Cumming, said a helpful tip is to make sure taxpayers match the final numbers on their W-2 form with their last pay stub.

She also said for those filing without assistance, don’t forget about the child tax credit, charitable donations or personal property taxes.

In the current economic climate, Foster said it’s not uncommon to see people filing freelance income as “people are desperate for any work they can get.”

“It’s probably been two years since I’ve seen that trend start on the incline,” she said.

Freelance tax paperwork is a little more complicated, Foster said. It can involve more deductions, but also more taxes.

For the unemployed who have been unable to find any freelance work, Carper said it’s still important to file taxes every year.

“For many people, it’s their first time facing unemployment and they don’t realize how much of it may be taxable and that they do have to claim,” Carper said.

“They may want to look into some help to make sure they do this type of tax return correctly. It’s unfortunate enough that they’re job hunting, they don’t want to complicate things by incorrectly filling out a tax return.”

Grier said 2011 is the perfect time to start or alter investments. As the economy has been heading south, “I’m finding that more and more people want some guarantees.”

Whether it’s shifting money into more conservative investments or looking for stocks that offer dividends, people are looking for that safety net, Grier said.

“I also have people that realize that we’re on the upside of a recovery, so the markets are poised to do better for the coming year,” she said.