I cannot believe 2011 is almost over, can you? You know what that means. File away the last of the financial statements of the year in your beautifully labeled and organized family finance filing cabinet to walk over to  your tax accountant the second your W-2′s, 1099′s, 1098′s et al. arrive in your inbox or mailbox.

Why are you laughing? Oh wait that’s the sound of me laughing at myself in my head. What it really means if you are not a super hero organizer is that it is time to bust out the scraps of paper you filed away throughout the year, print out bank statements, and get down to business.

2011 was a tough year for a lot of people and if you fell victim to unemployment, or having to move out of your town to find a job, there are a lot of extra circumstantial deductions and credits that you qualify for. Here is a list of circumstances to consider:

• Marriage
• Divorce
• New Children
• Job Hunting
• Big move (moving away for a new job, military PCS moves)
• Children in or out of college
• Day care expenses
• Investment portfolio
• Charity donations of items and time
• Home Business expenses
• Purchased a new home (military only)

Print out bank statements for the past year.

If you are good (unlike me) you will already have them printed out and highlighted for items that you can deduct on your taxes…something to think about for next year. Here is the process:

• Highlight the items that can be deducted on your taxes in yellow.
• Highlight job hunting expenses in green.
• Highlight charity and energy efficient purchases in blue.
• Highlight business expenses in pink.

**Of course, you can choose your own colors as well. This is just a guide.

© Hannah Chapman

Focus on Major Life Changes

Marriage

Did you get married or remarried this year? Check to see if it would be best to file your taxes together or separately. File separately if filing jointly will put you in a higher tax bracket which taxes a higher percentage of your income. You may be better off just doing your taxes separately.

Divorce

If you got divorced in 2011, remember to change all of your beneficiary designations. Big deal! Really. There is more about this at the end of this article.

Job Hunting Costs Can Be Deducted!

Please, please, please deduct your job hunting expenses from your taxes this year. You might not thing it is worth it, but little things can really add up. Here are some items that you can deduct as a result of job hunting:

© Yenhoon

• Lodging, transportation, and meals that take you away from home overnight.
• Resume writing service.
• LinkedIn Premium account.
• Premium job hunting services (JobPadHQ for example)
• Cab fares.
• Re-education
• Employment agency fees.
• Costs of printing resumes, business cards, postage, and advertising.
• Extra childcare costs from going on interviews.

**Job-hunting expenses incurred while looking for your first job don’t qualify.

Moving to a different city for a job

If you found a job, but you had to move, you can write off all the expenses incurred during that move. Don’t worry if you did not log all of the expenses when you moved, Locate your bank statements for the dates you moved and highlight everything in a different color that shows these extra expenses were a result of moving. Extra meals, extra car mileage, hotel lodges, childcare, etc.!

Focus on Children

Child Care Credit – Day Care Expenses

You can get 20%-25% of your child care costs back for the year if you qualify for the child care credit. Ask your day care provider for their Employee Identification Number (EIN). Then simply add up the total amount that you paid for childcare on your tax forms.

***Note for 2010 –  If your boss offers a child care reimbursement account, you should use it. It is a better deal because your child care is paid with tax free money and is a larger amount than the Child Care Credit.

Student Loans for Your Children or Yourself
If you are paying off your child’s student loans (or are still paying your own) then you can get a portion of your interest reimbursed through your taxes. All you need to do is go to Federal Loan Servicing Center. They have changed the URL to MyEdAccount.com and print out your tax form showing how much interest you paid on your student loans.

Energy Efficient Home Purchases and Charity – Doing good for the environment, people, and your taxes!

Energy Efficient Purchases
Did you buy an energy efficient washer and dryer this year? Those could be tax deductible, depending on whether your state has a program. What about a new car? I bought a Jetta TDi last year, which takes diesel fuel, and I qualified for a huge credit! I wouldn’t have known either, except the dealer told me.

Also, if you got energy efficient windows, or solar panels, you could get a credit for revamping your home to be more efficient. There are a lot of government programs, so make sure you get your credit.

Donations and Charity

© Marco Michelini

The little things really do add up. You can write off out-of-pocket costs incurred while doing work for a charity. I used to never list the things I did for charity, now I always ask for a reciept or verification from the charity. In fact, more people are finally doing this now. According to a local Goodwill worker, last year he handed out only a handful of receipts per month. This year they started running out of receipt books. “It is about time,” he said “people were just throwing money away!”

So make sure to keep those reciepts and if you spend more than $250 at any one organization, you will need written acknowledgement from that charity that states you did in fact donate more than $250.

Here are some examples of charitable donations to get you thinking:

• Ingredients donated to a soup kitchen
• Clothes donated to Goodwill
• Driving to and from a charitable organization - deduct 14 cents per mile plus parking and tolls paid while on good deed missions!
• Stamps donated to a school fundraising mail out
• Buying ANY supplies for a charitable organization

***Note for 2012…save ALL of your receipts!

Investment Portfolio Dust Off and Revamp

© Darren Shaw

It is just good financial housekeeping to revisit your portfolio annually. Things to look for are higher yields elsewhere, opportunities to reinvest in good funds, and deciding whether to reinvest or cash in on profits. (if you are in a high tax bracket, you should always reinvest. Lowering your income is a way to reduce your tax burden). Don’t forget about your 401k and mutual funds if you have them. You have to be aware of how the money is distributed and how your funds are doing.

If you were lucky and made money with your investments, then you can include your reinvested dividends in your tax basis. If you forget, then you will end up getting taxed TWICE on those dividends.  Here is how it works: You get taxed ONCE when the dividends are paid out and immediately reinvested in more shares and taxed AGAIN when they’re included in the proceeds of the sale. If you are confused, then ask the fund for help.

Review your Losses, especially if they are more than $3,000

If the losses in your portfolio are larger than your gains (which might be the majority of the population still) then you could deduct those losses from your taxes. Up to $3,000 of excess losses can be deducted each year, according to ROGER WOHLNER, the Smart Investor blog writer for US News and World Report Money edition. Also, remember that any losses above that limit can be carried forward to the next tax year which could further reduce your tax burden by lowering your income on paper.

Check your Beneficiary Designations

Here is what I touched on at the beginning of this article. If you are newly married (especially if you are newly RE-married) please look over your beneficiary designations and update them. Your new spouse will thank you greatly if you remarried and make sure you change your beneficiary designations (your prior spouse will thank you if you don’t). If you still have an ex-spouse as the beneficiary of an insurance policy then that person will get your insurance money when you die. Morbid, I know (I think I am known for talking about morbid things now on Blissfully Domestic. Geez), but super important. I always tell clients to put everything in their children’s names if there is ANY chance that the marriage is unstable. It only takes a phone call, or a few clicks online to change beneficiaries. Easy Peasy.

Here is a list of documents to check against beneficiary status:

• Workplace reitrement plans
• IRAs
• Annuities
• Insurance policies
• Vehicles
• Property and real estate.

Home credit for military

I had to send a financial shout out to my military community. The Home Buyer’s Credit is over for civilians, but  there is  a special rule for members of the uniformed armed services, the foreign service or the intelligence community. The exception is for those that were on extended duty outside the United States at least 90 days during the period after December 31, 2008, and ending before May 1, 2010.

According to Kiplingers, if you bought a home before May 1, 2011, you may qualify for a tax credit of $6,500- $8,000 depending on when you bought your home and if it was your first home.

Home Business Tax Prep

Hopefully you are awesomely organized and made a point to keep business and home expenses separate (I learned from that mistake). Here are some things that you can deduct that you might not have known.

Baggage Fees!

YES! If you are self-employed and traveling on business, you can deduct baggage fees from your taxes. Yay! I went to two blog conferences this year and it HURT to pay baggage fees 4 times for those two trips!

Business travel

** Make sure to keep your business and personal expenses separate in 2012. It makes everything easier when it is time to deduct!

Here is a checklist to help you get organized:

Print out tax forms

Write down major life changes

If newly married or divorce, change beneficiaries on financial accounts

If job hunting, itemize all of your job hunting expenses

Locate old receipts and verification of charitable donations

If you moved, itemize all of those expenses.

Update your investment portfolio.

Claim your losses and reinvest your dividends.

Claim your student loan interest refund

Claim your day care credit and check to see if your employer has a child care program.

other:

other:

other:

other:

Have fun organizing! It will pay off when those W-2′s come in. You can just sit down at your desk and file away, or head over to your accountant who will absolutely love you for not bringing over a shoebox of papers.

What are some other ways that you prepare for the end of year financial assessment? Anything else you recommend?