February 2, 2011

Break bad money habits this Groundhog Day

Greater self-awareness can help you short-circuit taxes, fees and penalties.

The Associated Press

(Continued from page 1)

No matter how you use your debit card, it's important to check account balances frequently to spot any irregularities as soon as possible.

FAILING TO BE TAX-SAVVY

Cutting your tax bill requires year-round attention. For instance, a threshold question is whether to itemize your deductions, and that requires some recordkeeping.

For 2010, taxpayers can itemize or choose the standard deduction allowed by the Internal Revenue Service – which is $5,700 for single filers or $11,400 for married couples filing jointly. If you've kept good records you may be able to save a sizeable sum by itemizing significant expenses for medical care, mortgage interest and taxes, or charitable contributions.

Also if you're an e-filing holdout, realize that software can help you save money. Tax- preparation programs ask questions to obtain data that should help you maximize your savings. For example, if you made an energy-saving home improvement last year, tax software can help you determine if you qualify for a tax credit.

NOT GETTING READY FOR WINTER

Punxsutawney Phil tells us whether to expect six more weeks of winter, but it's a mistake to wait until Feb. 2 to prepare.

Don't wait for a barrage of snow to reveal the draftiness of your home. Instead, conduct an energy audit to determine if additional insulation, new doors and windows can save you money. It may be too late for this winter, but insulation also keeps cool air in during the summer, so think ahead.

Also, don't forget about the damage winter weather might cause to your home or car. Winter storms are the third-largest cause of property damage, totaling about $1 billion annually, according to the Insurance Information Institute.

Take preventative measures: Car batteries can take a beating, and be sure your tires have enough tread to grip snow and your brakes aren't worn. Make sure your auto and homeowners insurance policy are sufficient. More information on cold weather considerations for homeowners and auto policies can be found at www.iii.org.

 

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