Year-end tax planning is the single most impactful financial activity most people skip entirely. Fidelity estimates the average taxpayer can save $2,000 to $5,000 annually with proactive December planning, yet the majority wait until April when most opportunities have already expired.
Key December deadlines include tax-loss harvesting (start by December 1 to clear wash-sale windows), Roth IRA conversions (fill up your current tax bracket before year-end), 401(k) contributions ($23,500 limit enforced at the plan level by December 31), charitable giving through donor-advised funds or appreciated stock donations, and FSA use-it-or-lose-it spending (up to $640 carryover depending on plan rules).
The year-end tax action plan follows a four-week December calendar: Week 1 for tax position review and AGI estimation, Week 2 for executing harvesting and conversions, Week 3 for verifying transactions settled, and Week 4 for documenting everything for your CPA. Each week builds on the previous, creating a systematic approach to capturing every available savings opportunity.
-Rocky
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Originally published on WealthWise OS.