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Prepare for tax season with our comprehensive year-end tax reminders for 2024. Discover key deadlines, retirement contributions, investment strategies, and more to optimize your tax savings and avoid penalties. Stay informed and make the most of your financial year-end planning!
As we approach the end of 2024, it’s the perfect time to get your financial affairs in order. Year-end tax planning is crucial to maximizing deductions, minimizing liabilities, and avoiding surprises when tax season rolls around. Whether you're a business owner, an individual taxpayer, or someone with complex financial matters, a proactive approach will save you both time and money.
In this guide, we’ll walk you through essential year-end tax reminders to ensure you’re well-prepared when April 15, 2025, arrives.
One of the most effective ways to reduce your taxable income is by contributing to retirement accounts. Depending on your situation, these contributions may be tax-deductible, lowering your overall tax liability.
✅ Pro Tip: Even though the deadline for IRA contributions extends until the tax filing deadline (April 15, 2025), it's best to maximize contributions by December 31st to align with your overall year-end financial planning.
If you have investments in stocks, bonds, or mutual funds, year-end is a great time to review your portfolio. Tax-loss harvesting allows you to offset gains by selling investments at a loss, reducing your taxable income.
✅ Pro Tip: Consult a tax professional before making significant changes to your portfolio to ensure you maximize tax savings without disrupting long-term financial goals.
If you're feeling generous during the holiday season, charitable contributions can also provide valuable tax deductions.
✅ Pro Tip: To claim a deduction for 2024, all charitable contributions must be made by December 31st. Make sure to research the organizations to which you are donating to ensure they qualify for tax-deductible donations.
If you have a high-deductible health plan (HDHP), an HSA is a powerful tool for tax savings. Contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free.
✅ Pro Tip: While you can make contributions up until the tax filing deadline, contributing before year-end helps ensure you maximize tax savings for 2024.
Related: Who Qualifies for a HSA Deduction?
If you’re 73 or older and have a traditional IRA, 401(k), or another qualified retirement account, the IRS requires you to take required minimum distributions (RMDs) by December 31st to avoid a steep penalty.
✅ Pro Tip: Consider using your RMD to make a qualified charitable distribution (QCD). QCDs allow individuals aged 70½ or older to donate up to $100,000 directly from their IRA to a qualified charity, which counts toward their RMD without increasing taxable income.
If you've made energy-efficient improvements to your home or purchased an electric vehicle (EV), you may be eligible for tax credits under the Inflation Reduction Act of 2022.
✅ Pro Tip: Keep all receipts and documentation for energy-efficient purchases, and consult a tax professional to ensure you claim all eligible credits.
For individuals who expect to be in a lower tax bracket next year, deferring income or accelerating deductions can help minimize your 2024 tax bill.
✅ Pro Tip: Be cautious when deferring income or accelerating deductions, as this can sometimes trigger the alternative minimum tax (AMT). A tax advisor can help you weigh the benefits of these strategies based on your overall financial situation.
If you’re self-employed or have income not subject to withholding, ensure you've made sufficient estimated tax payments throughout the year. Missing quarterly payments or having insufficient withholding can lead to penalties and interest.
✅ Pro Tip: The fourth-quarter estimated tax payment is due January 15, 2025. However, making this payment by December 31st allows you to claim the deduction in 2024.
The annual gift tax exclusion for 2024 is $18,000 per recipient, meaning you can give up to this amount to as many people as you want without incurring gift taxes.
✅ Pro Tip: Gifts above the annual exclusion count against your lifetime estate and gift tax exemption, which is $12.92 million per individual in 2024.
Tax laws are constantly evolving, and 2024 is no different. Stay informed about potential changes that could impact your tax strategy, such as new tax brackets, modifications to deductions, or updates to credits.
✅ Pro Tip: Working with a tax professional will help you stay ahead of any changes and ensure that your tax strategies are up to date.
Preparing for tax season doesn't have to be stressful. By staying organized, taking advantage of year-end tax-saving opportunities, and consulting with a tax professional, you can minimize your tax liability and start 2025 on the right foot. Don’t wait until the last minute—start planning today!
Being audited is comparable to being struck by lightning. You don't want to practice pole vaulting in a thunderstorm just because it's unlikely. Making sure your books are accurate and your taxes are filed on time is one of the best ways to keep your head down during tax season. Check out Vincere's take on tax season!
This post is just for informational purposes and is not meant to be legal, business, or tax advice. Regarding the matters discussed in this post, each individual should consult his or her own attorney, business advisor, or tax advisor. Vincere accepts no responsibility for actions taken in reliance on the information contained in this document.
For business tax planning articles, our tax resources provides valuable insights into how you can reduce your tax liability now, and in the future.
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