There's a hard line running through tax planning, and it falls on December 31.
Most of what actually changes your tax bill has to happen before that date. Once the year closes, your preparer is reporting history. The conversation in March is about what happened; the conversation in October is about what could still happen.
If you're going to spend an hour on your taxes outside of filing season, the fall is when that hour is worth the most. Here's what to look at.
Run a projection before you do anything else
Every decision below depends on one thing: where your income is going to land this year relative to last year.
If your income is up sharply, you want to accelerate deductions and defer income. If it's down (a job change, a business slowdown, a sabbatical, retirement), the opposite often applies, and a low-income year is one of the best planning opportunities you'll get.
You can't know which playbook applies without a projection. That's a genuinely useful exercise even if you do nothing else with it, because it also tells you whether you're on track with withholding and estimated payments. If it's been a while since you looked, the mid-year check-in that prevents an April surprise is a good place to start, even this late in the year.
Max out what you can still contribute
Employer retirement plans. Contributions to a 401(k), 403(b), or similar plan generally have to be made through payroll by year-end. If you're behind on where you wanted to be, you may be able to increase your deferral percentage for the remaining pay periods. Check whether you're capturing your full employer match. Leaving match on the table is the most expensive common mistake in personal finance.
Catch-up contributions. If you're 50 or older, there's additional room. There's also an enhanced catch-up available in a narrow age band, which is worth confirming if you're near retirement.
HSA. If you're on a qualifying high-deductible health plan, an HSA is the most tax-advantaged account available: deductible going in, tax-free growth, tax-free out for qualified medical expenses. HSA contributions for a year can generally be made up until the filing deadline, so this one has a longer runway.
IRA contributions. Also available until the filing deadline, though deductibility depends on income and whether you're covered by a workplace plan.
Self-employed plans. A solo 401(k) generally needs to be established by year-end even if funding happens later, while a SEP-IRA can typically be both established and funded later. If you're self-employed and considering either, the deadline difference matters.
Look at your investment accounts
Tax-loss harvesting. Selling positions at a loss lets you offset realized gains, and losses beyond your gains can offset a limited amount of ordinary income, with the rest carrying forward. Watch the wash sale rule: repurchasing a substantially identical security within 30 days before or after the sale disallows the loss.
Gain harvesting. Less well known, and more relevant in a low-income year. If your taxable income is low enough, long-term capital gains may be taxed at a 0% rate, which means you can realize gains and reset your basis higher at no current cost.
Capital loss carryforwards. If you have losses carried forward from prior years, they're already there waiting to offset gains. Check your prior return before assuming you need to harvest more.
Mutual fund distributions. Funds distribute capital gains near year-end, and buying into a fund just before a distribution means paying tax on gains you didn't participate in. Worth checking timing before large purchases in taxable accounts.
Consider a Roth conversion
Converting traditional retirement dollars to Roth means paying tax now at today's rates in exchange for tax-free growth and withdrawals later. It's a different move than a backdoor Roth contribution, but the two often come up in the same conversation. If you haven't seen it, backdoor Roth, explained without the jargon covers the contribution side.
The case is strongest in a year when your income is unusually low: early retirement before Social Security starts, a gap year, a business loss. You're filling up lower brackets that would otherwise go unused.
The math depends on your current rate versus your expected future rate, whether you can pay the tax from outside the retirement account, and downstream effects on things like Medicare premium surcharges. It's a decision that rewards running actual numbers rather than following a rule of thumb, and conversions must be completed by December 31, with no do-overs.
Time your charitable giving
Bunching. If your itemized deductions land just under the standard deduction most years, you get no benefit from them. Concentrating two or three years of giving into a single year can push you over the threshold in that year while you take the standard deduction in the others.
Donor-advised funds make bunching practical: you take the deduction when you fund the account and distribute to charities on whatever schedule you like afterward.
Appreciated securities. Donating stock you've held long-term generally lets you deduct the full fair market value while avoiding the capital gains tax you'd owe on a sale. This is almost always better than selling and donating cash.
Qualified charitable distributions. If you're old enough, giving directly from an IRA can satisfy required minimum distributions while keeping the amount out of your income entirely, which can be more valuable than a deduction.
Take your required minimum distributions
If you're subject to RMDs, take them. The penalty for missing one is significant, and the deadline is December 31 for most years. This is pure administration, but it's the kind that gets expensive when overlooked.
Check your withholding and estimated payments
If your income changed this year, your withholding is probably calibrated to last year's situation.
The fix is easy and the window is open now: adjust your W-4, or make a catch-up estimated payment. Withholding gets treated as though it were paid evenly throughout the year, so increasing it late in the year can repair an underpayment in a way that a Q4 estimated payment cannot.
Business owners: a few more levers
- Timing income and expenses. Cash-basis businesses have real flexibility in whether revenue lands in December or January, and whether expenses are paid before or after year-end.
- Equipment purchases. Assets placed in service by year-end may be immediately deductible. "Placed in service" means actually in use, not merely ordered.
- Accountable plans and reimbursements. Making sure owner expenses are properly reimbursed through the business before year-end.
- Entity structure. If your profit has grown substantially, an S corporation election for next year is a conversation to have now, not in April. See the point where an S-corp actually starts saving you money for how to think about the timing.
What can still wait
Not everything is a December 31 deadline. IRA and HSA contributions, SEP-IRA funding, and the decision of whether to itemize can generally still be made when you file.
That's a short list, though. Almost everything with real leverage closes with the calendar.
Worth a conversation
If you're not sure which of these applies to you, that's exactly what a fall planning conversation is for. A short projection now often changes the number on the return more than anything that happens in March. It's also a natural lead-in to individual tax preparation with our firm once the year actually closes.
This post is general information, not specific tax, accounting, or legal advice. Your situation may differ, so talk to us before acting on anything here.