Checklist Before Year-End Tax Moves

Year-End Tax Planning Framework

Year-end tax planning requires action before December 31. Unlike retirement account contributions (which may extend to April 15), most tax strategies must be completed by calendar year-end. Missing deadlines means waiting another full year.

This checklist organizes year-end actions into five categories: investment moves, retirement contributions, income and deduction timing, charitable strategies, and administrative tasks. Each section includes specific deadlines and dollar amounts for 2024.

Investment Tax Moves

Tax-Loss Harvesting

Deadline: December 31 (trades must settle, so execute by December 27-28 for stocks)

Tax-loss harvesting involves selling investments at a loss to offset capital gains. Net losses exceeding gains offset up to $3,000 of ordinary income annually, with excess carrying forward indefinitely.

Checklist:

• Review unrealized gains and losses across all taxable accounts
• Identify positions with losses exceeding $1,000 (transaction costs make smaller harvests inefficient)
• Calculate net capital gain/loss position year-to-date
• Harvest losses to offset gains, plus $3,000 for ordinary income offset
• Reinvest proceeds in similar (not "substantially identical") funds to maintain allocation
• Document wash sale compliance: avoid repurchasing same security within 30 days before or after sale

Wash Sale Warning: The wash sale rule disallows losses if you purchase substantially identical securities within 61 days (30 days before through 30 days after the sale). This applies across all accounts including IRAs. Purchasing the same ETF in your IRA within 30 days triggers wash sale treatment.

Example Calculation:

Year-to-date realized gains: $25,000 (long-term) Unrealized losses available: $18,000 in Fund A, $12,000 in Fund B Optimal harvest: $28,000 ($25,000 to offset gains + $3,000 for ordinary income) Sell: All of Fund A ($18,000) and portion of Fund B ($10,000) Immediate repurchase: Similar but not identical funds to maintain market exposure

Tax savings: $25,000 x 15% (LTCG) + $3,000 x 24% (ordinary) = $3,750 + $720 = $4,470

Capital Gain Harvesting

Deadline: December 31

If you are in the 0% long-term capital gains bracket (taxable income below $47,025 single / $94,050 MFJ for 2024), harvesting gains is tax-free and resets your cost basis higher.

Checklist:

• Calculate remaining room in 0% LTCG bracket after all other income
• Identify appreciated positions held over one year
• Realize gains up to remaining 0% bracket capacity
• Immediately repurchase (no wash sale rule for gains) at new higher basis

Example: Taxable income: $75,000 (MFJ). Room in 0% bracket: $94,050 - $75,000 = $19,050. Realize $19,050 in long-term gains at 0% federal tax. New basis = sale price, reducing future taxable gain.

Mutual Fund Distribution Planning

Deadline: Check fund company websites for ex-dividend dates (typically early to mid-December)

Mutual funds distribute capital gains to shareholders before year-end. Buying a fund shortly before distribution creates immediate taxable income with no economic benefit.

Checklist:

• Check estimated distribution dates for funds you plan to purchase
• Delay new purchases in taxable accounts until after ex-dividend date
• Consider whether existing fund holdings with large distributions should be sold before distribution and replaced with similar funds

Retirement Contribution Maximization

Employer Plan Contributions

Deadline: December 31 (contributions must be withheld from final 2024 paycheck)

2024 Limits:

• 401(k)/403(b)/457: $23,000 employee deferral
• Catch-up (age 50+): Additional $7,500
• Total combined limit (employee + employer): $69,000 ($76,500 with catch-up)

Checklist:

• Review year-to-date contributions on most recent pay stub
• Calculate remaining contribution room
• Increase deferral percentage to maximize before final paycheck
• Verify employer match is fully captured (some plans true up, others do not)
• Consider Roth vs Traditional allocation for remaining contributions

Payroll Timing Note: Your final contribution must be withheld from your last paycheck of the year. If you need to contribute $5,000 more and your December paycheck is $4,000 net, you cannot reach the target through payroll alone.

Mega Backdoor Roth

Deadline: December 31 (plan permitting)

If your 401(k) allows after-tax contributions and in-plan Roth conversions (or in-service distributions), you can contribute beyond the $23,000 limit up to the $69,000 total limit.

Checklist:

• Confirm plan allows after-tax contributions
• Confirm plan allows in-plan Roth conversion or in-service distribution
• Calculate remaining room: $69,000 - employee deferrals - employer contributions
• Make after-tax contributions through payroll
• Convert to Roth (in-plan) or roll to Roth IRA (in-service distribution)

IRA Contributions

Deadline: April 15, 2025 (but earlier contributions compound longer)

2024 Limits:

• Traditional/Roth IRA: $7,000
• Catch-up (age 50+): Additional $1,000

Checklist:

• Determine eligibility: Roth IRA income limits are $161,000 single / $240,000 MFJ (phaseout begins at $146,000 / $230,000)
• Decide Traditional vs Roth based on current vs expected future tax bracket
• If over Roth income limits, execute Backdoor Roth (non-deductible Traditional IRA contribution + conversion)
• Verify pro-rata rule compliance if you have existing Traditional IRA balances

HSA Contributions

Deadline: April 15, 2025 (but payroll contributions must occur by December 31)

2024 Limits:

• Self-only coverage: $4,150
• Family coverage: $8,300
• Catch-up (age 55+): Additional $1,000

Checklist:

• Confirm HDHP coverage for required months (must be HDHP-covered on December 1 for full-year contribution using last-month rule)
• Review year-to-date payroll contributions
• Make additional contribution directly to HSA if under limit
• Payroll contributions provide FICA savings; direct contributions provide only income tax savings

Income and Deduction Timing

Income Deferral

Deadline: Actions must be taken before income is earned or constructively received

If you expect lower income in 2025, defer 2024 income to reduce current-year tax.

Checklist:

• Delay year-end bonus payment to January if employer permits
• Postpone invoicing self-employment clients until January
• Delay exercise of non-qualified stock options if possible
• Defer RSU vesting if plan allows election (rare)
• Hold off on IRA-to-Roth conversions if 2025 bracket will be lower

Caution: Income deferral only makes sense if next year's bracket is lower or equal. If you expect higher income in 2025 (promotion, business sale, Required Minimum Distributions beginning), accelerate income into 2024.

Deduction Acceleration

Deadline: December 31 for most deductions

If itemizing and in a high bracket this year, accelerate deductible expenses.

Checklist:

• Prepay January mortgage payment in December (creates 13 months of interest in one year)
• Prepay state and local income taxes (but limited to $10,000 SALT deduction)
• Accelerate medical expenses if over 7.5% AGI threshold
• Pay property taxes before January 1 (subject to SALT cap)
• Make Q4 estimated state tax payment by December 31 instead of January 15

Bunching Strategy

Deadline: December 31

If you are near the standard deduction threshold, bunching two years of deductions into one year allows itemizing in the bunching year and taking standard deduction the other year.

Standard Deduction 2024: $14,600 single / $29,200 MFJ

Checklist:

• Calculate total itemized deductions (SALT capped at $10,000 + mortgage interest + charitable)
• If close to standard deduction, consider bunching charitable contributions
• Donor-advised fund contribution allows bunching multiple years of giving into single-year deduction
• Alternate years: bunch in odd years, standard deduction in even years (or vice versa)

Charitable Giving Strategies

Cash and Securities Donations

Deadline: December 31 (securities must be transferred by year-end)

Checklist:

• Donate appreciated securities held over one year (deduct fair market value, avoid capital gains tax)
• Do not donate securities with losses (sell, deduct loss, donate cash)
• Obtain written acknowledgment for donations over $250
• For donations over $5,000 of property, obtain qualified appraisal

Deduction Limits (2024):

• Cash to public charities: 60% of AGI
• Appreciated securities to public charities: 30% of AGI
• Excess carries forward for 5 years

Qualified Charitable Distributions

Deadline: December 31 (age 70.5+ required)

QCDs allow direct transfer from IRA to charity, excluding the distribution from income. QCDs satisfy Required Minimum Distributions.

Checklist:

• Confirm age 70.5 or older on distribution date
• Transfer directly from IRA custodian to charity (cannot touch your hands)
• Maximum QCD: $105,000 per person for 2024
• Obtain written acknowledgment from charity
• Report correctly: 1099-R shows full distribution, you report QCD exclusion on Form 1040

Donor-Advised Fund Contributions

Deadline: December 31 for contribution; grants to charities can be made in future years

Checklist:

• Contribute cash or appreciated securities to DAF before year-end
• Receive immediate tax deduction in contribution year
• Recommend grants to charities over time (no deadline for grants)
• Use for bunching: contribute 3-5 years of normal giving in one year

Roth Conversion Planning

Conversion Execution

Deadline: December 31 (no extensions, no do-overs)

Roth conversions are irrevocable. Convert Traditional IRA or 401(k) funds to Roth, paying tax now for tax-free growth.

Checklist:

• Calculate marginal bracket and room before next bracket
• Model conversion amount with CPA
• Consider state tax (conversions are fully taxable in most states)
• Evaluate IRMAA impact (income affects Medicare premiums two years later)
• Execute conversion with sufficient time for processing (allow 1-2 weeks)
• Pay estimated taxes or increase withholding to cover conversion tax

Optimal Conversion Target: Convert enough to fill current bracket without spilling significantly into the next bracket.

Example: MFJ taxable income of $150,000 before conversion. Top of 22% bracket: $201,050. Convert up to $51,050 at 22% rate before hitting 24%.

Administrative Year-End Tasks

Required Minimum Distributions

Deadline: December 31 (first RMD can be delayed to April 1 of following year, but this doubles income in that year)

Checklist:

• Calculate RMD for each account requiring distribution (Traditional IRA, 401(k) if separated from service, inherited IRAs)
• Use appropriate life expectancy table (Uniform Lifetime Table for most, Joint Table if spouse is sole beneficiary and more than 10 years younger)
• Aggregate Traditional IRA RMDs (can take from any IRA), but 401(k) RMDs must come from each specific 401(k)
• Consider QCD for up to $105,000 of RMD

RMD Age: 73 for those turning 72 after 2022; 75 for those turning 74 after 2032

Estimated Tax Payments

Deadline: January 15, 2025 for Q4 2024 estimated payment

Checklist:

• Calculate total 2024 tax liability estimate
• Compare to payments made (withholding + estimated payments)
• Determine if safe harbor is met: 100% of prior-year tax (110% if AGI > $150,000) or 90% of current-year tax
• Make Q4 payment by January 15, or increase W-2 withholding (treated as paid evenly through year)

Flexible Spending Account Use-It-or-Lose-It

Deadline: December 31 (or March 15 of following year if plan offers grace period)

Checklist:

• Check FSA balance and plan deadline (some plans allow $640 rollover or 2.5-month grace period)
• Schedule eligible medical/dental/vision expenses before deadline
• Purchase eligible items (glasses, contact lenses, first-aid supplies)
• Submit all reimbursement claims by plan deadline

Master Year-End Tax Calendar

Year-end tax planning creates permanent savings that compound for decades. The strategies in this checklist are time-sensitive and cannot be executed retroactively. Reviewing this checklist in early December provides sufficient time to execute all applicable strategies before deadlines expire.