Essential Tax Deadlines You Can’t Afford to Miss Before January 1
Introduction:
As the year winds down, tax deadlines are quickly approaching. Missing important tax dates can result in penalties, interest charges, or even missed tax-saving opportunities.
This guide outlines the critical tax deadlines you need to meet before January 1 to stay compliant and optimize your financial situation.
1. Estimated Tax Payments (Q4) – January 15
If you’re self-employed or have income not subject to withholding, mark January 15 on your calendar. This is when your fourth-quarter estimated tax payment is due. Avoid underpayment penalties by ensuring your tax liability is covered.
2. Charitable Contributions – December 31
Donating to qualified charities by December 31 can lower your taxable income. Be sure to keep receipts and documentation for any charitable donations, including cash, goods, or securities.
3. Required Minimum Distributions (RMDs) – December 31
If you’re 73 or older, you must take your required minimum distribution from retirement accounts like 401(k)s and traditional IRAs. Failing to withdraw the correct amount could result in a hefty 50% penalty on the amount not withdrawn.
4. Business Expenses & Purchases – December 31
Business owners should make tax-deductible purchases before year-end to lower taxable income. Consider stocking up on office supplies or investing in new equipment that qualifies for Section 179 depreciation.
5. Retirement Contributions – December 31 (for Certain Accounts)
Max out contributions to employer-sponsored retirement plans like 401(k)s by December 31 to reduce taxable income. IRA contributions can be made until the April filing deadline, but 401(k) deadlines are firm.
6. Health Savings Account (HSA) Contributions – December 31
Contribute to your HSA if you have a high-deductible health plan (HDHP). These contributions are tax-deductible, and funds roll over, offering long-term tax-free growth potential.
7. Harvest Capital Losses – December 31
Offset capital gains by selling underperforming investments before year-end. This tax-loss harvesting strategy can reduce your tax liability on investment income.
8. Review W-2 and 1099 Information
Ensure your employer has your correct information for W-2s and that any independent contractor work is accurately reported on 1099s. Correcting errors early can prevent filing delays.
Staying on top of these critical tax deadlines can help you avoid penalties and potentially reduce your tax bill. Consulting a tax professional can ensure you don’t miss any opportunities for year-end tax planning. Prepare now and start the new year with financial peace of mind.