We are fast approaching the end of 2024. I’ve talked with a few clients about some actions they can take before we turn the page to 2025.

In case you are asking yourself “wait, have I done everything I’m supposed to?,” here is a quick list. (Note, I wrote a detailed post on year-end action items in November. The items below are just the highlights from that post that must be done by 12/31)

1.) Finalize contributions to employer plans – Employer plans (like 401ks and 403Bs) follow calendar years. As a result, the annual limits are “use it or lose it” by December 31 of each year. For 2024, the max contribution $23,000 (with a $7,500 catch-up if you are over the age of 50). If you still have a pay period left in 2024 (and have room to make up your funding for the year), act fast!

2.) Process any Required Minimums Distributions (RMDs) – I wrote about RMDs here and the change to RMD rules here. In short, they are amounts you must withdraw from pre-tax retirement accounts per tax regulations. Penalties if you fail to do so by 12/31 are very steep so if you are subject to these rules, be sure to get your distributions made!

3.) Review realized gains/losses and harvest as needed – Taxable (ie: non retirement) accounts generate taxable items such as dividends, interest, and capital gains/losses (difference between what you paid for an investment and what you sold it for). Every year, it is worth taking a close look at taxable accounts and perhaps realizing some losses (that can be partially used to offset income or future capital gains). See more on tax loss harvesting here. Also pay close attention to the impact of mutual fund distributions which have likely been distributed to you by now (learn more here)

4.) Give back – It is an excellent time of year to give to those in need. But beyond that, there may be tax strategies that give you added motivation to donate. These donations follow a calendar/tax year. Consult your tax advisor – or proceed with gifting no matter the tax impact. A donor advised fund may be worth considering as well, as it allows you to strategically increase your charitable tax deduction in a given year (and make the gifts in future year(s))

5.) Give to family and friends– the current annual gifting exemption for 2024 is $18,000 per person per calendar year. The exclusion is “use it or lose it” so if you want to gift in the near future, you may as well use up the 2024 exclusion. Note: you can give more, a gift tax return will just be required! You can read more here

6.) Business financial review – if you are a business owner, you should have pretty good sightline to 2024 results at this stage. Work with your tax advisor to determine how your current year tax picture is looking and make plans to take any actions prior to year-end as appropriate

Have you taken care of all of these items? If so, you are all set and can sit back and enjoy the holidays. And if you have a few things to take care of yet, take a deep breath and work thru them in stride. You aren’t out of time….yet!

Here’s to a great year and all the good that awaits us all in 2025!