Ten smart money moves to consider before the end of 2013

Amid the hectic holiday season, who but Scrooge wants to dwell on taxes, stock losses, IRAs and 401(k)s? But it might pay off to take a few moments, given that some financial deadlines are fast approaching. To give you enough time before Dec. 31 rolls around, we've gathered 10 year-end smart money moves.

1. Use up your FSA.

If you're one of the estimated 14 million Americans with a Flexible Savings Account through their employer, now's the time to spend any money sitting in your account. Because it's use-it-or-lose-it, the tax-free money you've put in there to cover health care or dependent care costs will disappear if you don't spend it by Dec. 31. (Some employers offer an extended grace period - until March 15, 2014 - to use up the money.)

2. Donate, donate, donate

There's only about a week left to make donations to your favorite causes and charities. A few notes on tax deductions: If it's a cash donation, you'll need a bank record (canceled check, credit card statement, etc.) or a written receipt from the charitable group. Any donation above $250 always requires a written record from the charity.

If you're donating "gently used" clothing, furniture and other household items, keep a list of each item's estimated value. The Salvation Army, Goodwill and others have online lists, such as $2-to-$12 for a man's shirt, depending on condition. (Another option: Figure 25 percent of what you paid for it new, then lower the value based on condition.)

For vehicles and boats valued above $500, you can take a charitable deduction of the fair market value or how much they sell for if sold/auctioned by the charity, whichever is less.

Be careful where you donate. "I see a lot of people giving money to organizations that shouldn't be in business," said Sacramento tax preparer Dennis Graff, who recommends that clients check with rating services like CharityNavigator.org to see how much the charity spends on administrative costs. "If I'm giving a dollar, how much goes to the cause I'm supporting? If it's only a nickel, I'll find (a charity) that does a better job of distributing the money," said Graff.

3. Watch IRAs and 401(k)s

With your IRAs and 401(k)s, there are several deadlines to note.

For IRAs, if you're older than 70 1/2, you've got until Dec. 31 to take your annual mandatory distribution.

If you miss the Dec. 31 deadline, the penalty is 50 percent of the amount you did not withdraw.

For 401(k)s, don't forget to maximize your annual contribution, especially if your employer offers a matching contribution. If you're getting a year-end bonus, consider using it to increase your 401(k) contribution, said CPA Gregory Burke of John Waddell & Co. "Put in enough to at least get your employer's match; otherwise, you're leaving money on the table. And if you can, put in the maximum amount for 2013, both for the tax advantages and to build up your retirement savings." The annual contribution limit for 401(k)s this year is $17,500, with an additional $5,500 catch-up contribution for those 50 and older.

4. Dump the losers.

This year, with a booming stock market, many investors could be seeing sizable gains in their stock portfolio and in year-end mutual fund distributions. "This year, it could be substantial," said Graff, who recommends reviewing your investment portfolio to find potential losers that could be sold to offset the 15 percent capital gains tax.

Likewise, Burke said that many investors may have Treasury bonds that have decreased in value this year as interest rates went up. "If you were thinking of selling them anyway, sell them now to generate some tax savings and to offset your gains."

5. Taxes for same-sex couples

Same-sex couples should take note of several tax changes - and possible tax refunds. Last June, when the U.S. Supreme Court struck down part of the federal Defense of Marriage Act, it gave legally married same-sex couples certain tax benefits they'd previously been denied. The ruling also allows those couples to file an amended federal tax return - and possibly get a refund - for 2010, 2011 and 2012.

"If they're legally married, they'll want to be sure their employers have corrected their W-2s in 2013 to report correctly any benefits that have been paid for their spouse," such as health care premiums, said CPA Terri Davis of Harper Davis Financial in Sacramento.

Also, if a same-sex couple were legally married in tax years 2010-2012 but had to file their federal taxes separately, they could be entitled to an IRS refund. To see if you qualify, check with your tax preparer or sites like TurboTax.com. Davis said about 70 percent of her same-sex clients have applied for federal tax refunds, ranging between $1,000 and $2,500. "It's definitely worth doing," said Davis, noting that the first filing deadline - for a 2010 refund - is April 15 next year.

6. Get covered.

If you've never had health care or couldn't get affordable coverage in the past, now's the time to sign up under the federal Affordable Care Act. Technically, consumers have until March 31 to enroll in the mandatory coverage, but the earlier the better.

7. Year-end gifting?

In years past, many higher-income families gifted up to the maximum - $10,000 - to their adult children and grandchildren in an effort to keep their taxable income below the $1 million-per-person threshold that triggers the federal estate tax. But that's no longer necessary, due to federal tax code changes that went into effect in 2013. Those changes raised the estate tax to 40 percent, but also raised the estate tax exemption to $5.25 million per person, meaning a married couple could leave $10.5 million in assets that wouldn't be subject to federal estate taxes.

8. Home for the holidays.

If you've got college-age kids home for the holidays, be sure they've filled out an advance health care directive. "Too many parents don't realize that Mom and Dad don't have any right to medical information or to make health care decisions once a kid turns 18," said estate planning attorney Mark Drobny. If there's a medical emergency while a son or daughter is away at school, parents could legally get shut out of crucial information.

9. Check beneficiaries.

If you've had a major lifestyle change - divorce, wedding, children - it's a good time to check beneficiaries on your various accounts: IRAs, 401(k), life insurance, annuities, etc. It's not uncommon to forget about changing the beneficiary paperwork after getting married or divorced, noted Drobny. "If those accounts never get updated and someone dies, Mom and Dad get their benefits, not the spouse and kids. Or the ex gets the money," said Drobny, who sees examples of those situations every year.

10. Take heart.

With the new year just around the corner, take a moment to reflect. If you need a financial boost, think about a session with a nonprofit credit counselor. If you haven't updated your estate plan or will/trust, see your attorney. Maybe you want to figure out your retirement finances by sitting down with a certified financial planner. Above all, find reasons to be grateful for things that go well beyond money: family, friends and health.

(Contact Claudia Buck at cbuck@sacbee.com)