December is a busy time but it’s worth taking some steps now to help turbo start 2024 for your finances.
December is a busy time not just at work but socially as well. However, it’s worth taking a few minutes to consider if there is anything you can do now – before 31 December – which will improve your own or your family’s financial position.
- Review Your Income and Expenses: Analyse your income sources and expenses for the year. Ensure all invoices, payments, and receipts are accounted for. This will help in assessing your financial situation accurately.
- Tax Planning: Evaluate your tax liability and take advantage of available deductions and allowances before the year ends. Consider making pension contributions or charitable donations to reduce taxable income. Look out for any changes in tax laws that might affect your tax situation.
- Capital Gains Tax (CGT): If you’ve sold assets like property, shares, or other investments during the year, calculate potential capital gains tax liabilities. Consider strategies to offset gains with losses or utilise annual exemptions effectively.
- Gift Tax: There is an annual exemption of €3,000 per person for Gift Tax (Capital Acquisitions Tax) which means you could pass on this amount to each member of your family every year with no tax implications for them. Note that this is not restricted to families it applies to anyone you may choose to provide with a gift.
- Retirement Planning: Review your pension contributions and consider maximising them if possible, especially if it helps in reducing taxable income. Take advantage of any employer contributions or tax relief available for pension contributions. This needs to be finalised by 31 October next, but if funds are available to invest now, they can start work for you sooner.
- Savings and Investments: Assess your savings and investment portfolios. Consider how you can maximise your returns while keeping some funds accessible for the unforeseen.
- Debt Management: Review outstanding debts and consider making additional payments if possible to reduce interest payments or improve your financial situation in the coming year.
- VAT & Business Expenses: For business owners, review expenses, consider making necessary purchases or investments before year-end to maximise deductible expenses. If your VAT liability for this period is likely to be high, consider bringing forward any legitimate capital or operating expenditure to help reduce this period’s VAT.
- Healthcare Expenses: Some medical expenses may be tax-deductible. Consider making necessary payments before year-end to avail of these deductions.
- Review Insurance Policies: Check insurance policies for adequate coverage and evaluate if any adjustments or updates are needed.
- Budget and Financial Goals for the Next Year: Set financial goals for 2024. This could involve creating a budget, setting savings targets, or planning for significant expenses.
- Consult a Financial Advisor or Accountant: Seeking advice from a professional financial advisor or accountant can provide personalised guidance tailored to your specific financial situation.
Remember that these suggestions are general and may vary based on individual circumstances. Consulting a financial professional can provide personalised advice and ensure that you’re making the best decisions for your own and your family’s financial futures.