Nine Things to Double-Check with Your Accountant Before the End of the Year

Published on December 4, 2024 | 3 min read | LPL Financial

Before the year ends, it’s important to review your finances with a financial professional. Here’s a simple checklist of nine things to double-check to make sure you’re in good shape for the new year.

Review Your Tax Withholdings

If you know about how much you’ve earned this year, make sure you’ve withheld enough in taxes to avoid any penalty. If your income changed, you might also want to increase (or decrease) your withholdings to avoid surprises at tax time.

Manage Your Retirement Contributions

If your budget permits, make sure you’ve contributed the full amount allowed to any retirement accounts like a 401(k) or IRA. It’s not too late to add more this year, giving you a tax break.

Use Up Balances Remaining in Flexible Spending Accounts

If you have a Flexible Spending Account (FSA) to reimburse your out-of-pocket medical or childcare expenses, check to be sure that you’ve used the money in your account. Since remaining funds often don’t roll over to the next year, unless you use them now, you’re probably going to lose them.

Make Charitable Donations

You might lower your taxable income by making charitable donations before December 31 – just be sure to talk to your financial professional about whether it makes sense to donate and how to document and claim the donations.

Check for Tax Deductions and Credits

Look once more at the deductions and credits you’re entitled to. Examples include education credits, energy-efficient home improvements, and medical expenses. Review your tax return from last year to see what deductions you claimed then and whether you’re still eligible.

Plan for Estimated Tax Payments

If you’re self-employed or have other income not subject to withholding, such as interest or dividends, make sure you paid enough income tax through estimated tax payments during the year. Not only does not paying estimated taxes leave you owing money on April 15, but it might also result in a penalty.

Review Investment Gains and Losses

See how your investment accounts performed. If you made money on investments outside certain retirement accounts, you may owe taxes on your gains. If you lost money, you might be able to use those losses to lessen your tax liability.

Discuss Any Big Financial Changes

If you sold a house, got married or divorced, changed jobs, moved to another state, or had a baby during the last year, alert your financial professional. These events might also affect the way you calculate your net worth.

Organize Your Financial Records

Keep your bank statements, credit card slips, and receipts handy – this strategy makes the tax season easier for you and your financial professional. Staying organized now may save you a headache later on.

Reviewing these items before the end of the year might save you money at tax time, help you avoid end-of-the-year surprises, and give you a head start for the new year. It’s always better to be prepared, so take some time to review this checklist to see how you’re doing.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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