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12/15/2014

’Tis the season

It’s easy to get busy with holiday events and miss some important year-end financial issues.

Property taxes

We received our escrow check and our property tax bill this past week.  Our escrow check is $285 more than our property tax bill.  We could mail it in, and the city treasurer would send a refund check in 6 weeks.  The better option for us it to stop by our financial institution.  If we show them a copy of our property tax bill, they will reissue the escrow as two checks — one for the city of Madison and one for us.  

Flex Spending Accounts (formerly known as Employee Reimbursement Accounts (ERA) Program

’Tis the season to empty out your flex spending account for 2014, especially if you are an employee of the state of Wisconsin.  The state is switching vendors for the program.  There will be a black out period starting January 1st where funds from 2014 will be unavailable as balances are transferred from the old vendor (WageWorks) to TASC.  The end date for the black out period isn’t specified —  “it is anticipated that any remaining 2014 funds will be available for use by the end of January.”  (Read more about the transition details here. )  That means if you submit $500 of claims on January 1st for child care or healthcare expenses, you may have to wait 30 days (or more?) to receive your reimbursement. 

We are very thankful that we have avoided this problem by submitting all of our reimbursement requests.  It is the first year we have emptied out our flex account early.  Normally we wait until March and then scramble to find the receipts needed for reimbursement claims.  Using the on line app made filing reimbursements much easier this year.  It also helped that we had a goal (to pay off our car loan ASAP) and we were actively managing our money.  In the past we treated it like a weird savings account (that never paid us interest).  It wasn’t a well-thought out plan.  Now that we have a budget and lots of sub accounts, getting our early reimbursements helps with our cash flow.  

We did get a pleasant surprise with our final round of claims this month.  I thought we had withdrawn our entire $5000 for childcare, but there was still over $800 in the account.  It pays to check your accounts closely.  

Takeaway for the Week

What is more important than we realized:   Submit your flex spending reimbursements requests throughout the year.  You will get your money back to help cover your real-time expenses.   The on-line applications make submitting requests easy.  

What is easier than we thought:  If you are a homeowner with an overage in your property tax escrow check, see if you can get a quick return from your bank or credit union.

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As a follow up on year end issues: We discovered rather painfully that ACH bank transfers that are scheduled for the first of the month are sent a day early if the first of the month is a holiday. So our preschool payment due Jan 1, 2015, got paid on Dec. 31, 2014 instead. I discovered the error when it was too late to cancel the ACH transfer. So, evaluate your scheduled payments closely for January 1st. Check to see when your pay check for the month will be deposited. If you work for the State of Wisconsin, checks that are typically deposited on the 31st of the month, are held and deposited on/about January 2nd of the new year. This lead to our other bank account having insufficient funds on the 31st. It was a brutally sad way to end PM, trudging from the credit union to the bank to deposit money to cover the early payment. As Connie mentioned in her last blog, mistakes will be made - but hopefully not many. We are keeping the big picture in mind as we go forward. There are so many things to cheer about as we end the year.

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