Year-end checklist: 8 actions to take before 2024 is over

Stay on track with important tasks and deadlines that could help boost your retirement savings and lower your taxes.
Couple reviewing their finances

The final months of the year are a great time to review your finances and address crucial housekeeping tasks, but they can also be very busy. Amid the rush of year-end activities, investors also must contend with the many IRS-imposed deadlines for retirement savings and tax purposes.

To help you sort through the many time-sensitive financial tasks that need addressing, here’s a checklist of essential actions to complete before the year ends. We are here to help you tackle these to-dos to help you end the year on a strong note.

In this article:

  1. Max out your retirement accounts, if possible
  2. Harvest your investment losses and gains
  3. Take your RMDs
  4. Make charitable gifts or QCDs
  5. Consider a pre-tax Roth conversion or backdoor Roth IRA
  6. Spend any remaining FSA funds
  7. Reflect on your financial goals
  8. Meet with us
  9. Questions to discuss with us

1. Max out your retirement accounts, if possible

Tax-advantaged retirement accounts, like IRAs and 401(k) plans, can help reduce the amount of overall taxes you owe on your investment earnings. As the year comes to an end, look at how much you contributed so far in 2024 and increase, or max out, your contributions by the year-end deadline, if possible. Not only can this help lower your taxes, but it can provide an added boost to your retirement savings accounts.

The 2024 maximum contribution limits for retirement tax-advantaged accounts are:

  • IRA: $7,000 (or $8,000 if you’re 50 or older)
  • 401(k): $23,000 (those 50 and older can contribute an additional $7,500)

Deadline: 401(k) contributions must be made by Dec. 31, 2024. IRA contributions for the 2024 tax year can be made until April 15, 2025.

Advice spotlight

If you’re on the brink of a higher tax income bracket for 2024, consider increasing your contributions to your 401(k). By doing so, you can reduce your taxable income, helping you to lower the overall amount you owe in your tax bill for the 2024 tax year.1

2. Harvest your investment losses and gains

The end of the year can be an optimal time to harvest losses and/or gains. At this point, you have a sense of what your income tax bracket will be for the year, as well as your portfolio’s performance, giving you a clearer understanding of potential tax implications. If you’ve experienced investment losses, you may consider tax-loss harvesting, which involves selling investments at a loss to offset the taxes owed on capital gains from other investments. On the other hand, you may consider tax-gain harvesting, which entails selling assets that have appreciated in value when it is most advantageous, such as during a year when you are in a lower tax bracket or when you have losses to offset the gain.

Deadline: Dec. 31, 2024, to have your harvested gains or losses count for the 2024 tax year.

3. Take your RMDs

If you’re age 73 or older, then you are subject to the IRS required minimum distribution (RMD) rules, which mandate that a minimum amount must be withdrawn from qualified retirement plan accounts by Dec. 31 each year. After decades of saving for retirement, it can be difficult for some retirees to begin withdrawing those funds — but it’s a legal requirement once you turn 73. If you do not take a distribution or if you withdraw less than required, you could face penalties from the IRS.2

Deadline: To avoid tax penalties, withdraw the correct RMD amount from the necessary retirement accounts by Dec. 31, 2024. If you recently turned 73, you may have until April 1, 2025, to make your withdrawal for 2024, but would still need to take your 2025 RMD by Dec. 31, 2025.

4. Make charitable gifts or QCDs

The last few months of the year are a popular time for nonprofits and charities to run end-of-year giving campaigns to boost financial support for their causes. If you itemize your taxes and charitable giving is a priority, consider increasing your giving or make a year-end donation to your preferred charity to be eligible for a tax deduction for the 2024 tax year.

If you’re aged 70½ or older, consider making a qualified charitable distribution (QCD) from your IRA, instead of a direct gift. QCDs count toward your RMD amount if you have not taken it.3 When you donate the withdrawn funds to a charity via a QCD, neither you nor the charity will owe taxes on the amount.

Deadline: Make your charitable gift or QCD by Dec. 31, 2024, for the 2024 tax year.

Advice spotlight

Consider whether it makes sense to defer or reduce your taxable income for the year. To lower your 2024 tax bill, you may want to take advantage of strategies to postpone taxable income until 2025. For example, you could defer your year-end bonus or refrain from taking distributions from your investment accounts until the new year begins. Contributing to tax-deferred retirement accounts can also help reduce your taxable income.1

5. Consider a pre-tax Roth conversion or backdoor Roth IRA

By the end of the year, you typically have a general sense of your income tax bracket. If you find yourself in a lower bracket than usual, it could be a good opportunity to consider a pre-tax Roth conversion, which involves converting pre-tax assets to a Roth IRA or Roth 401(k). When you implement such a conversion, you’ll owe taxes on the converted funds for the year of conversion. And if you’re in a lower tax bracket, you’ll typically owe less taxes on the converted funds.

High earners who are ineligible to contribute to a Roth IRA because of income restrictions may want to consider initiating a backdoor Roth IRA in 2024. A backdoor Roth is a strategy in which you make post-tax contributions to a new or existing traditional IRA, and then simply convert those funds to a Roth IRA.4

Deadline: A pre-tax Roth conversion or a backdoor Roth must be finalized by Dec. 31 to count for the 2024 tax year. Even if you don’t complete a conversion in 2024, you have until April 15, 2025, to make IRA contributions for the 2024 tax year, and could always convert in 2025.

Learn more: Tax diversification: A strategy to help your assets last

6. Spend any remaining FSA funds  

If you have employer-sponsored benefits, you may have access to a flexible spending account (FSA). FSAs allow you to contribute pre-tax money — up to a certain amount — to an account that can be used to pay for eligible out-of-pocket health care expenses or eligible dependent care services, such as childcare. However, FSA funds typically are “use it or lose it,” meaning they generally do not roll over into the next calendar year.5 To avoid losing any unspent funds, make a plan to use the money before the year is up.

Deadline: Make the most of your FSA by utilizing remaining funds before Dec. 31, 2024.

7. Reflect on your financial goals

As the end of the 2024 nears, you may find yourself reflecting on the progress you’ve made toward your financial goals. You may want to ask yourself:

  • Are there any steps I can take before the end of the year to meet my financial goals?
  • Do I need to adjust or amend any of my financial goals?
  • Are there any new financial goals that I can start making progress on?

Deadline: There is no deadline. Consider reflecting on your goals before your next meeting with my team.

8. Meet with us 

We are here to assist you in completing essential year-end financial tasks, providing the support needed to finish the year strong and continue progressing toward your financial goals.

Deadline: If you need help with any of the financial actions in this article, schedule a meeting with us today.

Questions to discuss with us

  • Which of the financial actions listed in this article should I consider before the year ends?
  • Does it make sense for me to consider tax-loss harvesting or tax-gain harvesting in 2024?
  • Should I initiate a Roth conversion or backdoor Roth this year?
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