The year is winding down, and your finances might be sitting there untouched. There are moves you can make right now to keep more cash, reduce taxes, and get smarter with your money before the calendar flips. Some are easy, others require a bit of planning—but all are worth it. Here are the moves you should consider before the year ends.
Max Out Retirement Account Contributions
Contributing to your retirement account before December 31 ensures it counts for this year’s taxes. Employer-sponsored plans, like a 401(k)—a workplace retirement savings account with annual contribution limits—must follow strict rules. Many people procrastinate, forgetting it’s like giving your future self a valuable holiday gift. Don’t miss the deadline.
Harvest Tax Losses
That stock that’s been dragging down your portfolio? It can actually help you at tax time. Sell it before December 31 to offset other gains and reduce what you owe. It’s one of the easiest tax strategies out there, yet investors routinely leave this money on the table.
Make Charitable Donations
Charitable giving works for your taxes only if you donate by year-end. Clear out your closet, write a check, or drop off old furniture—it all qualifies. You also help others while lowering your tax bill. Keep records of what you give for when tax season rolls around.
Prepay Deductible Expenses
Paying deductible expenses like property taxes before year-end reduces what you owe on this year’s taxes. You’ll lower your tax bill and cross an item off next year’s to-do list. However, check with your local tax office about what qualifies for early payment.
Spend Remaining FSA Funds
A Flexible Spending Account (FSA) lets you set aside pre-tax money through your employer for medical expenses. Any unused funds usually disappear after December 31, so it’s smart to spend them on prescriptions, medical supplies, or other eligible items before the year ends.
Use Up Employer-Provided Benefits
Review your workplace benefits before December 31. Wellness credits and education stipends usually expire at year-end. Book that massage, sign up for a class, or use your fitness allowance now. These perks are also part of your compensation, so don’t let them disappear unused.
Accelerate Mortgage Or Loan Payments For Deduction
Make an extra mortgage payment to increase your deductible interest on this tax return. The additional payment reduces your loan balance while boosting your tax deduction. It’s a double win—you pay down debt faster and lower your taxable income at the same time.
Make Annual Gift Contributions
The IRS (Internal Revenue Service), the U.S. government agency that oversees taxes, lets you gift a certain amount tax-free each year, but the limit resets in January. Give money or assets before year-end to use this year’s allowance. This is a simple way to share wealth with family while staying within tax rules. And you can even double it by gifting to multiple people.
Finalize Energy-Efficient Home Improvements For Credits
Install energy-efficient improvements to claim valuable tax credits. Upgrades like insulation, heat pumps, windows, or solar panels all qualify if completed in time. You save on taxes now while reducing future utility costs. It’s an investment that pays you back multiple ways over time.
Top Up HSA Contributions
Your Health Savings Account is more valuable than most people realize. Adding money to it reduces what you pay in taxes and builds a fund for medical expenses. The balance grows over time, and you can use it whenever healthcare costs come up.
