Now that the frenzy of filing your income tax returns is over, you can sit back and relax, right? Not so fast! If you were like most people, you didn’t have everything in order and found yourself wishing you had.
RumboughWhy not start now? You can use your 2011 tax return as a guide. Set up a separate file for your salary, interest and dividends, and other income items that you reported. This also goes for each deduction you claimed on Schedule A, if you filed one, such as charitable contributions, property taxes, medical expenses, etc. As you receive statements in the mail, receipts for purchases, check stubs, etc., just drop them in the appropriate file and you will be ready next year when tax time comes.
While you are in the organization mode, now is a good time to check your estate plan. Is it up to date? Look over your will and make sure that it will distribute your assets to those you want to receive them. Have you considered leaving something to your church or other charity through your estate? It’s easy to do through a codicil, or amendment, to your will. You can also do this through a beneficiary designation change to your retirement account or life insurance policy.
How about your personal belongings, such as china, boats, furniture, jewelry? Is there someone special you want those to go to? If your will contains a clause allowing you to list personal property items and to whom they are to go to, be sure to prepare the list according to your attorney’s instructions, and file it along with your will. If you have already done this, read over it and make sure it is up to date. Another item you need to keep close by your will and other estate-planning documents is a list of all your assets and liabilities, complete with names, addresses, account numbers, contacts and telephone numbers.Also, be sure to have a list of professionals and close friends or relatives who would need to be contacted at your death, such as your attorney, CPA, employer, etc.
Finally, have you ever thought about that one special thing you would like to say to those you love? You can do it through a letter to them, and file it with your will and other papers. If you think that gathering information together to file your tax return was difficult, imagine how difficult it would be for someone else to have to find all of these items should you pass away. Make it easy for someone to manage your affairs after you’re gone. If you need help with this, contact your attorney, CPA, or the Baptist Foundation of South Carolina.
– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.