Year-End Tax Checklist for Individuals

Why year-end tax planning matters

Year-end tax planning is the moment to translate a year of financial activity into tax-smart moves. Small timing decisions — making a deduction before December 31, harvesting an investment loss, or increasing retirement deferrals — can change whether you owe taxes or get a refund, and can affect tax credits and phaseouts. In my practice advising individuals for over a decade, a focused December review has consistently reduced surprises and, in many cases, delivered material tax savings.

Below is a practical, prioritized checklist with why each item matters, how to act, and where to confirm rules. Where appropriate I link to authoritative guidance and related FinHelp resources for deeper reading.

Quick year-end checklist (prioritized)

1. Estimate year-to-date income and tax liability (run a quick tax projection).
2. Confirm payroll withholding or make an estimated tax payment if underpaid.
3. Maximize retirement and HSA opportunities available this tax year.
4. Review investment gains and losses for tax-loss harvesting and wash-sale risk.
5. Time deductible expenses (state taxes, mortgage interest, charitable gifts).
6. Use remaining FSA or dependent care benefits before they expire.
7. Gather and organize tax documents (W-2s, 1099s, brokerage statements).
8. Check credits you may qualify for (education, childcare, energy credits).
9. Decide whether to file an extension (file extension vs. pay tax due).

Detailed year-end tasks and how to do them

1) Income, withholding, and estimated taxes

• Why: Underpaying federal estimated taxes or payroll withholding can trigger penalties. Overpaying ties up cash.
• Action: Use your most recent paystubs, 1099s, and a tax projection (software or your tax preparer) to estimate your 2024 tax liability and compare it to taxes already paid. Adjust Form W-4 with your employer to increase/decrease withholding if needed — see IRS guidance on the W-4 form (irs.gov/forms-pubs/about-form-w-4).
• If self-employed or receiving substantial 1099 income, consider an additional estimated tax payment for the current quarter; see IRS estimated taxes guidance (irs.gov/businesses/small-businesses-self-employed/estimated-taxes).

In my experience, many clients discover a shortfall in December that can be fixed with a withholding change or one extra estimated payment, avoiding penalties.

2) Retirement accounts and tax-advantaged savings

• Why: Retirement contributions can reduce taxable income today (traditional accounts) and build tax-advantaged savings.
• Action: Max out employer-sponsored retirement deferrals if you can; elective deferrals for 401(k)/403(b) generally must be made by year-end to count for that tax year. For IRAs, contributions for the prior year may often be made up to the tax filing deadline — confirm current limits and deadlines on the IRS retirement pages (irs.gov/retirement-plans).
• HSA: If you’re eligible, make sure you’ve made the full HSA contribution for the year; HSA contributions are deductible and can be made through your tax filing deadline in some cases (see IRS Publication 969).

Note: Contribution limits and RMD rules have changed in recent years. Check the latest IRS pages or consult your advisor before assuming limits.

3) Investments: gains, losses, and tax-loss harvesting

• Why: Capital gains tax results from selling appreciated assets; realized losses can offset gains and, to a limited extent, ordinary income.
• Action: Review brokerage statements for realized gains or unrealized losses. Consider harvesting losses to offset gains, but be mindful of the wash-sale rule (which disallows a loss if you buy a substantially identical security within 30 days). Work with your advisor or tax preparer to sequence trades to minimize tax friction.

For investors and high earners who need a deeper strategy, see our related article on year-end moves for investors and high earners: “Year-End Tax Checklist for Investors and High Earners” (https://finhelp.io/glossary/year-end-tax-checklist-for-investors-and-high-earners/).

4) Charitable giving and donation timing

• Why: Charitable contributions can reduce AGI when you itemize; timing matters for deductibility.
• Action: If you itemize, consider bunching donations into one year or donating appreciated securities (which can give both a deduction and avoid capital gains) — our guide on donating appreciated securities covers timing and tax benefits: “Donating Appreciated Securities: Tax and Timing Checklist” (https://finhelp.io/glossary/donating-appreciated-securities-tax-and-timing-checklist/).
• Keep receipts and contemporaneous written acknowledgments for contributions of $250 or more; the IRS requires documentation.

5) Itemized deductions vs. standard deduction

• Why: Many taxpayers now take the standard deduction; itemizing only helps if your eligible deductions exceed it.
• Action: Run both scenarios (itemizing vs. standard). Pay attention to deductible state and local taxes, mortgage interest paid by Dec. 31, and medical expenses that exceed the IRS threshold for deductibility.

6) Flexible spending accounts, dependent care, and use-it-or-lose-it rules

• Why: Unused FSA funds may be forfeited or limited by carryover options.
• Action: Check your plan’s rules (some employers offer a small carryover or extended grace period). Spend or plan eligible reimbursements before deadlines.

7) Self-employed and small business considerations

• Why: Self-employed taxpayers have separate rules: business expenses, retirement options, and estimated tax payments.
• Action: Review deductible business expenses, ensure you’ve made required estimated payments, and consider year-end purchases or equipment purchases (and potential bonus depreciation) that may alter taxable profit.
• See our checklist for freelancers and gig workers for items specific to independent contractors: “Tax Compliance Checklist for Freelancers and Gig Workers” (https://finhelp.io/glossary/tax-compliance-checklist-for-freelancers-and-gig-workers/).

8) Documentation and recordkeeping

• Why: Good documentation speeds tax preparation and reduces audit risk.
• Action: Collect W-2s, 1099s, brokerage 1099-B and 1099-INT, mortgage interest statements (Form 1098), and receipts for deductions and credits. Keep digital copies in a secure location.

9) Deadlines, extensions, and payments

• Why: Filing an extension (Form 4868) extends the time to file but not to pay taxes due; interest and penalties can accrue on unpaid taxes.
• Action: If you need more time to assemble records, file Form 4868 for a six-month extension to file, but estimate and pay any tax owed by the original due date to avoid penalties — see IRS Form 4868 guidance (irs.gov/forms-pubs/about-form-4868).

Common mistakes to avoid

• Assuming an extension extends the payment deadline — it does not.
• Forgetting wash-sale rules when buying a replacement position after selling at a loss.
• Missing IRA contribution deadlines or assuming 401(k) deferrals can be changed retroactively after year-end.
• Failing to document charitable gifts properly.

Quick action plan for the final two weeks of the year

1. Run a tax projection and flag any shortfall. 2. Increase withholding or make an estimated payment if needed. 3. Make deductible state/local tax payments or charitable gifts before Dec. 31 if those items are part of your plan. 4. Confirm FSA/HSA contributions and use-it-or-lose-it rules. 5. Collect documentation and schedule a meeting with your tax preparer.

Resources and authoritative guidance

• IRS — Form W-4 and withholding: https://www.irs.gov/forms-pubs/about-form-w-4
• IRS — Estimated taxes (self-employed): https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes
• IRS — Filing an extension (Form 4868): https://www.irs.gov/forms-pubs/about-form-4868
• IRS — Retirement account rules and contribution deadlines: https://www.irs.gov/retirement-plans
• CFPB — Consumer guidance on taxes and avoiding scams: https://www.consumerfinance.gov

Professional note: In my practice, a December review that includes a rapid tax projection and two tactical adjustments (withholding + one charitable or retirement move) typically eliminates surprises for clients. If you have complex investments, a new job, or life changes (marriage, divorce, having a child, moving states), engage a CPA or qualified tax advisor early.

Disclaimer: This article is educational and not a substitute for personalized tax advice. Tax laws, limits, and dates change; consult the IRS or a qualified tax professional for your specific situation.