Magazine

18 To-Dos for Your Year-End Tax Planning Checklist

By Ellevest Team

You know how they say if you’re thirsty, you’re probably a little dehydrated? The same idea‌ applies to tax season prep. If you’re doing your planning the same year you’re filing, you’re probably a little squeezed for time. 

For many filers, February to April might not feel like a tight turnaround. But there are advantages to giving yourself a cushy December 31 deadline. Year-end tax planning allows you plenty of time to consider your unique tax situation, assess what you might do to reduce your bill, and make both necessary and beneficial adjustments. When you do end-of-year tax planning, you’re strategizing, not scrambling. 

So, what might a year-end tax planning session look like? 

If your filing is straightforward or circumstances haven’t changed much since last year, you might tick the boxes on this year-end tax planning checklist over an evening or two. Then sit back and wait for your W2 / 1099s to come to you.

If your filing is complex, has changed from last year (think: increases or decreases in salary), or you hit major life milestones, you might want to work through the checklist before you meet with your tax pro. It’ll help you make the most of your time together. Bonus: Scheduling your official check-in this far in advance should shake off some tax planning stress.

If you’re unsure of what kind of tax planning support you need, book a free 15-minute call with an Ellevest financial planner. This tax season, there’s no scrambling on our watch.

Year-End Tax Planning Checklist

Get ready for tax season.

  1. Download your pay stubs and end-of-year statements — bank accounts, credit cards, mortgage(s), student loans, investment accounts, etc. Save them in a folder for easy access. 

  2. Pull up last year’s taxes to refresh yourself on what you filed. Save this with your other tax documents — having it handy might save you time filling out information on certain tax software programs.

  3. Check the balance on your Flexible Spending Account (FSA). Typically FSA funds are “use it or lose it” by year-end. So, plan to spend the funds ‌fully if your employer doesn’t offer a grace period or allow a rollover into the new year.

  4. Review possible deductions for the year, including medical and dental expenses, child care expenses, educational expenses, mortgage interest, etc.

Assess any changes to your tax situation. Talk about making adjustments with your tax pro.

  1. Did your income change this year — did your pay increase or decrease? Did you get a bonus

  2. Did you have any stock options vest?

  3. Do you expect income to increase next year due to a promotion, new job, bonus, or equity compensation?

  4. Did you recently add a baby to the family, purchase a home, or get married?

Make contributions to tax-advantaged accounts.

  1. Contact your HR department to see if there’s still time to contribute to your traditional 401(k) by December 31. If so, contribute as much as you can.

  2. If you have an IRA, make a plan to max out your contributions by April of 2024. You must open and fund that account before April 15, 2024.

  3. If you have an HSA available, have already maxed out 401(k) and IRA contributions, and have more funds available, make a plan to max out contributions by April 15, 2024.

Make any donations to charity.

  1. Look at your December budget and decide how much you want to give.

  2. Choose a non-profit that aligns with your values. To be used in tax deductions, charitable giving donations must be made to 501(c)(3) organizations.

  3. Donate one time (or set up recurring donations and give more in 2024!).

Work closely with a tax pro.

  1. Ask colleagues, family, and friends for a referral to a good tax pro, if you need one. (We know a few! You can book a 1:1 tax planning session with an Ellevest enrolled agent, aka tax pro.) 

  2. Have a few questions about your taxes? Book 30 Minutes with an Ellevest Tax Pro for answers — and you’ll leave with clarity and confidence when it’s time to file. 

  3. Need a detailed financial plan that factors in your taxes? Check out our Comprehensive Planning Package + Tax Strategy that teams you up with both a tax pro and a CFP® pro. 

  4. Not sure? Book a free 15-minute call to see which financial or tax planning session is right for you.


Disclosures

© 2023 Ellevest, Inc. All Rights Reserved. 

All opinions and views expressed by Ellevest are current as of the date of this writing, are for informational purposes only, and do not constitute or imply an endorsement of any third party’s products or services. 

Information was obtained from third-party sources, which we believe to be reliable but are not guaranteed for accuracy or completeness. 

The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities, and should not be considered specific legal, investment, or tax advice. 

The information provided does not take into account the specific objectives, financial situation, or particular needs of any specific person. 

Investing entails risk, including the possible loss of principal, and past performance is not predictive of future results.

Ellevest, Inc. is an SEC-registered investment adviser. Ellevest fees and additional information can be found at www.ellevest.com.

Ellevest Team

The Ellevest team is working to help women reach their financial goals.