Taking ActionTaking Action for Your Money


The most important things to consider with your finances for the new year

Piggy bank
Posted at 5:20 PM, Jan 06, 2022
and last updated 2022-01-06 17:23:19-05

NORFOLK, Va. - There are some important things to consider with your finances as we start the new year.

News 3 anchor Todd Corillo talked with our financial expert and CEO of Carlson Financial, Carl Carlson, to find out what you need to be doing right now.

One of the key things due to a short timeline is if you have to pay quarterly estimates, that's taxes. If you had to pay those, your deadline is January 17. That's for people that have income that maybe you didn't withhold taxes on it.

Carlson says one of the big culprits there is a Roth conversion, because often people don't withhold taxes on a Roth conversion since it's best strategy not to. And if you did that in the final quarter of the year, then your income may be high for the year 2021 and you may need to pay an estimate before the deadline, which is usually it's January 15. But that's on a Saturday, so it's January 17 this year.

If you've had income that you didn't withhold taxes on last year, talk to your certified personal accountant (CPA), make sure you get that estimate paid before January 17 to avoid any penalties.

As for what else we need to be thinking about in 2022, Carlson says as we're all planning for our retirements or financial freedom someday, we need to be thinking about how much money are we saving or putting aside.

So, a lot of that for a lot of us out there is work retirement plans, and those are things like 401(k)s, thrift savings plans (TSPs) and 403(b)s - it all depends on where you are. work,

If you haven't done so already, how much should you be putting into your 401(k)? And should you be putting in into the Roth side of the 401(k), or the traditional side of that work retirement plan or 401(k)?

Carlson said that's key to figure out: How much; what percent; and making sure if your company gives you a match that you are putting in enough money into your work retirement plan to get all of the match they're giving you.

He says oftentimes, that might be something like, if you put in 3%, they'll match it and put in 3%. So, Carlson says you've got to make sure you're at least putting in 3% to get that free money.

So key number one, make sure you're funding your work retirement plan, with enough money and into the right type of attacks account.

Carlson says you should also be thinking about whether you should be putting money in a Roth IRA as a contribution or a traditional IRA outside of your work or if it should just be going into a normal account, like a brokerage account that doesn't have any tax benefits.

He says if you figure those things out and get them right at the beginning of the year, you'll be set for the rest of the year.

Another key thing, he says, is if you're going to be doing Roth conversions, that's converting an IRA to a Roth IRA.

If you're thinking about a Roth conversion this year, he says to plan that now you may not want to do it. If the stock market is up, then you may want to wait and when the stock market drops or takes a big dip - then that's when you might want to go ahead and make that Roth conversion. He says a very good strategy if you're doing Roth conversions is to plan ahead and be ready to convert an opportune time.

Related: Income tax planning tips for 2022