Tax Planning Tips Before the End of the Year
The end of the year is more than holiday shopping and New Year’s resolutions—it’s your last chance to reduce your tax bill before filing season begins. Here are some smart, simple moves to make before December 31st.
1. 💰 Max Out Retirement Contributions
Contribute to your 401(k) or IRA to lower your taxable income.
For 2024, you can contribute up to $23,000 to a 401(k) and $7,000 to an IRA ($30,500 and $8,000 if you’re 50+).
Every dollar helps—and it adds up for retirement!
2. 📉 Harvest Tax Losses
If you sold investments at a loss, use those losses to offset capital gains.
You can also deduct up to $3,000 in losses against regular income.
This strategy is called tax-loss harvesting—and it’s a savvy end-of-year move.
3. 🎁 Make Charitable Donations
Donate to qualified charities before December 31st for a possible deduction (if you itemize).
Keep receipts and documentation for all donations—cash and non-cash.
4. 🧾 Review Withholdings & Estimated Taxes
Check your tax withholdings using the IRS Tax Withholding Estimator.
If you’re self-employed or had side income, consider a 4th quarter estimated tax payment to avoid penalties.
5. 🏥 Use FSA Funds
If you have a Flexible Spending Account, use your remaining balance—many plans follow the “use it or lose it” rule!
Eligible expenses include medical visits, prescriptions, glasses, and more.
✅ Quick Tip: Make a checklist and set aside a couple of hours to review finances before year-end. A little effort now can save you stress—and money—later!