by Vonda J. Sines

Created on: December 31, 2008

The clock's ticking down, but there's still time to take advantage of five helpful financial steps before 2009. In the midst of an ailing economy, any one of them might improve your financial situation. They're suggestions of American financial guru Mary Hunt, writing in her EverydayCheapskate publication.

1. Check your HSA balance. If you participate in a health care spending account (HSA) courtesy of your employer, you've had money deducted from each paycheck up to the amount you specified for the year. Be sure to check to see if there is still an unspent balance because any funds left in the account will be lost - you won't get a refund or be able to carry the dollars over to the next calendar year. If you find you still have money in the account, check the list of eligible expenses and head for your local pharmacy or supermarket to stock up on needed supplies of over-the-counter pain relievers or allergy medications. Need to order contact lenses soon? Make sure you pay for them by December 31.

2. Fund your retirement savings plan. If you participate in a 401(k) plan, you can contribute up to $15,500 a year. However, if you're at least 50, the maximum jumps to $20,500. Double check your contributions with your human resources department. If you're not at the maximum contribution level, consider adding some funds and ask if you can make a one-time contribution.

3. Send a donation to your favorite charity. It's deductible on your income taxes if you itemize deductions. If you can afford it, consider sending an end-of-2008 gift to a nonprofit and cut your tax bill at the same time. Just make sure your check or credit card charge is dated December 31 or earlier.

4. Non-financial charitable gifts. You can make a quick sweep of your closets, bookcases and drawers to see if you have items in suitable condition that you're willing to donate. You will need to keep a record of the items you give and note the fair market value of each. Some off-the-shelf income tax software brands will designate a fair value once you enter a description of each gift when you prepare your taxes. You can also check out Hunt's web site above for a booklet called "Money for Your Used Clothing 2008." It contains valuations for 800 commonly donated clothing and household items and can be used as a workbook for tracking your donations.

5. Make some payments early. You can reduce your 2008 income taxes if you itemize deductions by making your January 2009 mortgage payment in December, assuming it's partially interest. However, this is really only helpful if you anticipate you will actually owe additional taxes for 2008. Otherwise, you're just shortchanging 2009 as far as your tax picture. You might also consider hauling out your checkbook early to pay other deductible items. Examples include real estate taxes if you pay them directly, separate from your mortgage, and property taxes such as fees levied on vehicles for personal use. If there's a problem finding a post office open to postmark your payment by midnight on December 31, consider using the postage machine in the lobby of your local post office. Postage dispensed will show the current date.

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