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healthcare FSAs will shrink to $2,500 from the $5,000 limit many employers currently offer; however, if your spouse has FSAs at work, you still may contribute up to $2,500 to each account. Dependent care account limits remain unchanged.
• It's vital to calculate and use any untapped 2012 account balances before your plan-year deadline (sometimes up to 75 days into the following year); otherwise, you'll forfeit the remaining balance. If you have a surplus, consider which 2013 expenses you could pay before December 31, 2012. And, keep the new limit in mind when planning your 2013 healthcare FSA.
• You can use your healthcare FSA for copayments, deductibles and medical devices such as glasses, contact lenses and braces, among other expenses; over-the-counter medicines are only eligible with a doctor's prescription (an exception is made for insulin).
• Charitable contributions. If you plan to itemize deductions on your 2012 taxes, charitable contributions made to IRS-approved organizations by December 31, 2012, are generally tax-deductible. If you've got extra cash now and want to lower your 2012 taxes even further, consider moving up donations you would have made in 2013.
• Gifts. Unless Congress intervenes, the federal income tax exemption for estate distributions and lifetime gifts will drop from the 2012 limit ($5.12 million) to the pre-2011 level of $1 million (for married couples, it drops from $10.24 million to $2 million); in addition, the tax rate on gifts or estate distributions above those limits will increase from 35 percent in 2012 to 55 percent in 2013.
• One way to exceed the lifetime gift limit - and avoid having to file a Gift Tax Return - is by giving separate, annual gifts of up to $13,000 per year, per person. (Married couples filing jointly can give $26,000 per recipient.) Rules for gift and estate taxes are complex, so read IRS Publication 950 (at www.irs.gov) and consult your financial advisor.

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