As the year comes to a close, it’s time to think about your taxes. Don’t worry; we’ve got a simple checklist to guide you through the process:

1. Review Your Income and Deductions

What to do: Take a look at your income for the year. Identify deductible expenses such as business expenses, charitable contributions, and educational expenses.

Why it matters: This helps you understand your overall financial picture and identify opportunities for deductions.

2. Maximize Retirement Contributions

What to do: If you haven’t maxed out your contributions to retirement accounts like a 401(k) or IRA, consider contributing more before the year ends.

Why it matters: Contributions to these accounts are often tax-deductible and can help you save for the future.

3. Consider Tax-Loss Harvesting

What to do: Review your investment portfolio. If you have investments with losses, you might consider selling them to offset gains.

Why it matters: This can help reduce your overall taxable income for the year.

4. Charitable Giving

What to do: If you plan to make charitable donations, do so before the end of the year. Don’t forget to get receipts for your contributions.

Why it matters: Charitable contributions are often tax-deductible, so giving before the year ends can provide immediate tax benefits.

5. Review Health Savings Account (HSA) Contributions

What to do: If you have an HSA, ensure you’ve maximized your contributions for the year.

Why it matters: HSA contributions are tax-deductible, and the funds can be used tax-free for qualified medical expenses.

6. Check Your Flexible Spending Account (FSA) Balance

What to do: If you have an FSA, check the balance. Some plans require you to use the funds before the end of the year.

Why it matters: FSA contributions are often “use it or lose it,” so don’t let those pre-tax dollars go to waste.

7. Review Business Expenses

What to do: If you’re a business owner, review your business expenses. Consider making necessary purchases before the year ends.

Why it matters: Business expenses are often tax-deductible, and making purchases before year-end can reduce your taxable income.

8. Check Your Tax Withholding

What to do: Review your tax withholding to ensure it aligns with your expected tax liability.

Why it matters: Having the right amount withheld can prevent surprises at tax time and ensure you’re not overpaying or underpaying.

9. Stay Informed on Tax Law Changes

What to do: Keep an eye on any last-minute tax law changes that might affect your situation.

Why it matters: Being aware of changes allows you to adapt your year-end strategy accordingly.

10. Consult with a Tax Professional

What to do: If in doubt, seek advice from a tax professional. They can provide personalized guidance based on your specific financial situation.

Why it matters: Tax professionals can help you navigate the complexities of the tax code and ensure you’re maximizing your potential deductions.

Conclusion

With this simplified year-end tax planning checklist, you can approach tax season with confidence. Take a bit of time now to review your finances, make strategic moves, and set yourself up for a successful tax year.

Here’s to a stress-free tax season in 2024!

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Dan W. Nowell Wealth Management and not necessarily those of Raymond James. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.