Year-End Tax Planning Checklist for Members

Creating a Year-End Tax Planning Checklist can help you make the most of your financial situation and minimize your tax liability. Here’s a comprehensive checklist that you can use:

Year-End Tax Planning Checklist

1. Review Income Sources

• Collect all income statements (W2s, 1099s, K1s).
• Estimate total income for the year, including bonuses and side jobs.

2. Evaluate Deductions

• Standard vs. Itemized Deductions: Determine whether to itemize deductions (mortgage interest, state taxes, medical expenses, etc.) or take the standard deduction.
• Charitable Contributions: Gather receipts for donations made throughout the year.
• Medical Expenses: Track eligible medical and dental expenses if itemizing.

3. Retirement Contributions

• Max out contributions to retirement accounts (401(k), IRA, etc.).
• Consider a backdoor Roth IRA if income limits restrict direct contributions.

4. Tax Credits

• Check eligibility for available tax credits (e.g., Earned Income Tax Credit, Child Tax Credit, education credits).
• Gather documentation needed to claim credits.

5. Flexible Spending Accounts (FSAs)

• Use remaining funds in FSAs before the year-end deadline.
• Plan for next year’s contributions.

6. Review Investments

• Capital Gains/Losses: Review your investment portfolio and consider selling underperforming investments to offset gains.
• Tax-Loss Harvesting: Consider selling securities at a loss to offset taxable gains.

7. Tax Withholding and Estimated Payments

• Review your current tax withholding status and make adjustments if necessary.
• Ensure any required estimated tax payments are made.

8. Education Planning

• Consider contributions to 529 Plans or Coverdell ESAs for education savings.
• Review any tax credits for education expenses.

9. Business Expenses (if self-employed)

• Track all business-related expenses.
• Consider purchasing necessary equipment before year-end for additional deductions.

10. Review Past Year’s Tax Return

• Look for areas of improvement based on last year’s return.
• Identify any changes in your financial situation that could affect your tax liability.

11. Keep Up with Tax Law Changes
Stay informed about changes in tax law that could affect your situation (e.g., changes in deductions or credits).

12. Document Important Transactions

• Maintain records for major transactions (real estate sales, significant gifts, etc.).
• Organize documents for easy access when filing taxes.

13. Consult a Tax Professional

• Schedule a meeting with a tax advisor to discuss your situation and strategies.
• Ask about specific strategies that may apply to your circumstances.

14. Plan for Next Year

• Assess changes in income that may affect tax planning for the coming year.
• Set financial and tax goals for the upcoming year.

Final Steps

• Finalize Year-End Checklist: Go through each item to ensure nothing is overlooked.
• Stay Organized: Keep all relevant documents together for easy access when filing your tax return.