Debbie Levenson, CFP® of Braver Wealth Management, is quoted in the Boston Globe’s article “Dividing your year into quarters can help your finances”

Dividing your year into quarters can help your finances

January 11, 2015 Lynn Asinof

Want to make good on your New Year’s resolution to improve your personal finances? Grab your calendar. With 354 days left in 2015, it can be an incredibly effective financial planning tool.

Begin by filling in key tax filing dates: April 15 for federal and state income taxes, Oct. 15 if you file a tax extension, and estimated tax payments on Jan. 15, April 15, June 15, and Oct. 15. Then write in birthdays, particularly those with financial consequences such as 59½, when you can tap retirement accounts without penalty.

Set aside time for tackling important financial planning tasks such as reviewing household budgets, revising estate plans, or updating insurance coverage. Don’t forget to schedule financial housekeeping tasks such as organizing files, scanning documents, and adjusting withholding. Finally, note big expenditures — such as tuition bills — that might require additional cash on hand.

When you’re done, you’ll have a guide to financial tasks quarter-by-quarter, month-by-month, week-by-week, and day-by-day. The concept isn’t new. Businesses do financial planning by the quarter, setting goals and measuring results. Yet individuals too often ignore the calendar until an important deadline looms.

So, turn to a financial-planning guide based on the 2015 calendar. Some may opt to use an old fashioned paper calendar; others may prefer programs like Outlook or Google Calendar that send automatic reminders. Not all tasks come with firm deadlines, but don’t just skip them. Instead, grant yourself an extension and reschedule for a future date.

First quarter: Gather your thoughts and your tax documents

It’s time to take stock, appreciate your financial accomplishments, and set goals for the future. For Deborah Levenson, vice president of financial planning at Braver Wealth Management in Needham, that starts by creating an updated net worth statement.

“It’s your 20,000-foot view,” says Levenson, who looks forward to this as her first financial planning task every January. “I’ve been doing this every year since I graduated from college.”

Levenson suggests creating a spreadsheet using year-end account statements, the estimated value of your home, outstanding balance on your mortgage, school loans, and any other significant assets and liabilities. It’s a good way to see where you are so that you can think about where you are going, she says. Doing it every year makes it easier to see how things have changed over time.

The next step: Set some financial goals. Start with a budget, and then create savings targets. Perhaps you want to save $1,000 every quarter for the kids’ college fund or put aside $500 a month for a new car. Marking them on your calendar can help you stay on target.

People should “true up” their numbers, reconciling their expected tax bill with the amount already paid or withheld. If they’re short, they can make up the difference with an estimated tax payment on Jan. 15. One way to avoid IRS underpayment penalties: Make sure withholding and estimated tax payments equal or exceed 100 percent — 110 percent for high-income filers — of the prior year’s tax.

Another first-quarter task is getting organized, says Grafton “Cap” Willey, a managing director in the tax group at CBIZ Tofias in Providence. This is the time to not only gather your 2014 tax documents but also to set up a bookkeeping system to monitor what happens in 2015. When you create a file or folder for the W-2s and 1099s that will soon arrive, for example, make sure you also create files for 2015 documents, such as tax bills and charitable donations that you will generate during the year.

If you use tax software, you can often find it at a discount now. If you use an accountant, find out when you will need to deliver your tax information in order to meet the April 15 filing deadline. It’s not uncommon for an accountant to set that cutoff date at March 15.

Check on your flexible spending accounts so you don’t forfeit the pre-tax dollars you set aside for child care or medical expenses in 2014. Different plans have different rules, but March 15 is often the deadline for filing claims for reimbursement for expenses incurred in the past year. Double-check the rules of your plan so you don’t miss your deadline.

Finally, check your cash balances. If it looks like you’re going to owe taxes, make sure you’ve got enough on hand to cover the tax bill so you don’t have to scramble at the last minute.

Key dates:

Second quarter: File your income tax returns or get an extension, then catch your breath and keep going

Once the second quarter arrives, April 15th isn’t far behind. If you don’t have your returns ready to file by then, you’ll need an extension. That will push your filing deadline to Oct. 15, but you’ll still need to pay the bill when you request your extension. Fail to pay the full tax bill and you will probably incur interest and penalties.

New this year are requirements created by the federal health care overhaul. Most filers will simply have to check a box on their return that says they had health insurance for themselves and their families during 2014.

Those who purchased insurance through health care exchanges and received advance premium tax credits, however, will have to reconcile their income with initial projections they provided to the exchange, says Jackie Perlman, principal tax research analyst with the Tax Institute at H&R Block.

April 15 is also the deadline for funding your 2014 IRA, although different deadlines apply for small business plans such as SEP IRAs and SIMPLE IRAs. Many people wait until they have a rough income tax calculation to see if they can use their IRA dollars — up to $5,500 for those under 50 and $6,500 for those who are older — to fund a Roth IRA, which offers some key advantages. Married couples filing jointly can fully fund a Roth only if their modified adjusted gross income is less than $181,000.

Unlike traditional IRAs, Roths are funded with after-tax dollars and don’t provide deductions that can cut your tax bill now. However, qualified withdrawals from Roth accounts, including any income or capital gains, generally aren’t subject to income tax.

If you owe the government taxes, this is a good time to adjust your withholding. If you paid significant tax on investment income, you might want to consider switching up some of your investments. Financial advisers commonly recommend that income-producing investments such as bonds and dividend stocks be held in tax-advantaged retirement accounts. Then use taxable accounts for investments that produce capital gains, which are taxed at much lower rates.

What if you find you made a mistake when filing? Don’t fret. You can file an amended return, but wait until the IRS processes your original return. “Don’t do it right away,” Perlman recommends. “Wait a few weeks to avoid any confusion.”

Key dates:

Third quarter: Halfway through and time for a checkup

There aren’t a lot of required financial tasks in the third quarter, making it the perfect time to tackle bigger projects such as estate planning, college savings, insurance reviews, updating beneficiary forms, or revisiting the household budget.

Some of these tasks — such as estate planning — don’t need to be done every year. So pick one project that hasn’t gotten enough attention and dig in. Insurance needs, for example, change over time as people get married, have children, buy homes, change jobs, retire, and have grandchildren.

Having a teenager about to start driving, for example, might be a good reason to increase your umbrella insurance policy — an inexpensive form of coverage designed to protect you and your assets from lawsuits.

While you’re reviewing your coverage, don’t forget to update your home inventory for your homeowner’s insurance. That might be as simple as making a video tour of your home, identifying all of your possessions to prove ownership. Or you could use a program such as the Insurance Information Institute’s “Know Your Stuff,” which is available for free online.

This can be a good time to rebalance your portfolio, a task that financial planners typically recommend be done once a year. Using your June 30 account balances, check to see whether market changes have significantly shifted your asset mix. A raging bull stock market, for example, might mean that you’ve now got 70 percent of your assets in stocks, rather than the 60 percent you intended. If things are out of balance, make some adjustments, moving money, say, from stocks to bonds to return to your original asset mix. You might want to make these adjustments in your tax-advantaged retirement accounts so that you don’t trigger taxes.

If you’re headed on vacation, take along some financial reading. One basic book Levenson recommends is “The Elements of Investing” by Burton Malkiel and Charles Ellis. For those seeking meatier reading, she suggests David Swensen’s “Unconventional Success: A Fundamental Approach to Personal Investment.”

It’s also a good time to review your budget to make sure you are staying the course. And don’t forget to make sure you have sufficient cash available because back-to-school preparations can bring big cash demands such as tuition payments, textbook purchases, and new clothes for the kids.

Key dates:

Fourth quarter: Time to start thinking about year’s end

The financial planning pace picks up in the fourth quarter because there are lots of year-end tasks and only three months to do them.

“October is a good time to make sure you are on track for your retirement goals,” says Dana Levit, a fee-only financial planner based in Newton, noting that people might want to put aside more money for their nest egg.

Levit also tells clients to think about employer benefits well before they have to sign up during open enrollment periods in November and December. Decisions here range from which health insurance plan to choose to how much money to tuck into flexible spending plans. Folks enrolled in Medicare might want to do a similar review so they can decide whether they want to change their plan during the open enrollment period, which runs Oct. 15 to Dec. 7.

Don’t wait until the last minute to take steps to lower your April 15 tax bill, such as harvesting capital losses by selectively selling securities, prepaying taxes or tuition, or making contributions to charitable organizations. The deadline is Dec. 31 for all those activities, and these transactions don’t happen overnight. For example, if you want to donate stock to a charity, you need to allow ample time for the transaction to be completed. That can take a couple of weeks.

Finally, if you haven’t done it already, check your credit rating. Each of the three nationwide credit reporting companies will provide you with a free copy of your credit report every 12 months. There’s a central website,, and a toll-free telephone number, 877-322-8228, to order your report.


Originally published January 11, 2015 in the Boston Globe.

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