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The Year-End Tax Planning Checklist Most Households Miss
By December, most tax-saving moves are gone. Here is what to review before year-end so you do not leave money on the table when April arrives.
Tax planning is not the same as tax preparation. Preparation is what your CPA does in March with last year's numbers. Planning is what should happen before December 31, while you can still change the outcome.
Most households we work with come in mid-year with a stack of W-2s, K-1s, and 1099s — and a vague hope that "the CPA will figure it out." By the time the CPA sees it, the year is over. The opportunities are gone.
The high-leverage moves before year-end
These are the items we walk every client through in our fourth-quarter review. Not all apply to everyone, but missing one is expensive.
1. Max out tax-advantaged contributions
- 401(k) / 403(b): contribute up to the annual limit; if you are 50+, add the catch-up. If you are 60–63, add the enhanced catch-up (SECURE 2.0).
- HSA: the most tax-favored account in the code — deductible going in, tax-free growth, tax-free out for medical. Max it.
- Backdoor Roth and Mega-Backdoor Roth: if your income disqualifies a direct Roth contribution, these are still available in most plans.
2. Harvest losses — and gains
Tax-loss harvesting in a down year offsets gains and up to $3,000 of ordinary income. Carry the rest forward. Equally important: in low-income years, harvest gains at the 0% long-term capital gains bracket (yes, it still exists).
3. Run the Roth conversion math
The same logic from the retirement income piece applies here: a low-income year is a Roth conversion year. Even a partial conversion of $25–50k from a Traditional IRA into a Roth, paid for with outside cash, can save six figures over a lifetime.
4. Bunch charitable giving
The standard deduction is high enough that itemizing every year does not pay. Instead, bunch two or three years of charitable giving into a single year using a Donor-Advised Fund. You itemize that year, take the standard deduction the next two, and give to charities on your own schedule.
5. Review entity and compensation choices
For business owners: are you on the right entity? Is your reasonable compensation defensible? Have you funded a Solo 401(k), Defined Benefit, or Cash Balance plan that fits your real income? December 31 is the deadline to start a plan for the year.
6. Estimated payments and safe harbor
Underpayment penalties are silent. We confirm every client is either at safe harbor (110% of last year's tax if AGI > $150k) or has paid 90% of this year's projected liability — whichever is easier.
The point of all this
None of these moves are exotic. They are standard tools. What makes the difference is someone running the checklist with you, every year, on a schedule — not waiting for an April surprise.
Frequently Asked
Common Questions
When is the deadline for tax planning each year?+
Most planning moves — Roth conversions, charitable gifts, loss harvesting, retirement plan contributions for an existing plan — must be completed by December 31. A few items (IRA and HSA contributions, SEP-IRA funding) extend until your tax filing deadline. Starting a new retirement plan generally must happen by year-end.
What is the difference between tax planning and tax preparation?+
Preparation reports what already happened — your CPA in March files the return based on last year's transactions. Planning shapes what happens before the year closes, while you can still change the outcome. The two should be coordinated; planning without preparation creates errors, and preparation without planning leaves money on the table.
Do I need both a CPA and a financial planner?+
Yes, but they need to talk. A planner without a CPA misses compliance and filing nuance; a CPA without a planner files what already happened. We coordinate the two so your tax return reflects strategy, not just history.