7 Tax Moves to Make Before December 31, 2024

The last six weeks of the year are the most powerful tax planning window you have. Decisions made between now and December 31 directly affect what you’ll owe — or receive back — next April. After December 31, most of these opportunities close permanently for the current tax year.

Here are seven concrete moves to consider before the calendar turns.

Move 1: Max Out Your 401(k) — $23,000 Deadline

The 2024 401(k) employee contribution limit is $23,000 (or $30,500 with catch-up if you’re 50+). Contributions must come from paycheck deductions, not lump-sum transfers, which means you need to work with your employer’s payroll system before your last paycheck of the year.

If you’re not on track to hit the limit, increase your contribution percentage now. Most payroll systems process changes within one to two pay periods.

Why it matters: Every dollar contributed reduces your taxable income dollar-for-dollar. For someone in the 22% bracket, contributing the full $23,000 instead of $20,000 saves an additional $660 in federal income tax this year — plus state income tax savings on top.

Use our paycheck calculator to model how increasing your 401(k) contribution affects your net take-home pay per paycheck.

Move 2: Harvest Tax Losses Before December 31

If you hold investments that are currently worth less than you paid for them, selling before year-end lets you realize those losses for tax purposes. Capital losses offset capital gains dollar-for-dollar, and up to $3,000 of excess losses can offset ordinary income annually. Remaining losses carry forward to future years.

The wash-sale rule: After selling at a loss, you cannot buy back the same or substantially identical security within 30 days (before or after the sale). You can immediately reinvest in a similar-but-different fund to maintain market exposure — for example, selling one S&P 500 ETF and buying a different S&P 500 ETF from another provider.

Example of the math: You have $8,000 in long-term capital gains from selling appreciated stock. You also hold a position with a $10,000 unrealized loss. Harvesting the loss eliminates your $8,000 gain, saves an additional $3,000 in ordinary income, and carries $5,000 forward to 2025.

Move 3: Bunch Your Charitable Deductions

The 2024 standard deduction is $14,600 (single) or $29,200 (MFJ). If your itemizable deductions usually fall just below the standard deduction, you’re getting no tax benefit from charitable giving in most years.

Bunching means doubling up two years of giving into one calendar year, crossing the itemization threshold, then taking the standard deduction the next year. In the “on” year, your deductions are itemized and you capture the full charitable deduction. In the “off” year, you take the standard deduction.

Alternatively, consider a Donor-Advised Fund (DAF). You contribute a lump sum to the DAF in 2024 (and deduct it this year), then distribute grants to your chosen charities over 2024 and 2025. You control the timing of the deduction separate from the timing of the actual charity gifts.

Move 4: Spend Down Your FSA

If you have a Health Care FSA or Dependent Care FSA, check your remaining balance now. Most FSAs have a “use it or lose it” rule — unspent funds revert to your employer at year-end (some plans have a $640 rollover option or a 2.5-month grace period; check your plan documents).

Eligible FSA expenses include:

• Eyeglasses, contact lenses, and eye exams
• Dental work (fillings, crowns, cleanings)
• Prescription medications
• Over-the-counter medications (no prescription required since 2020)
• First aid supplies, blood pressure monitors, thermometers
• Mental health counseling (check your specific plan)
• LASIK surgery

Schedule any overdue medical or dental appointments now. Don’t leave FSA money on the table.

Move 5: Consider a Roth Conversion Window

A Roth conversion means moving money from a traditional IRA (or similar pre-tax account) to a Roth IRA, paying income tax on the converted amount now in exchange for tax-free growth and withdrawals in retirement.

The optimal time for a Roth conversion is when your income is temporarily lower than usual:

• Year of a job loss or career transition
• Year with significant deductible business losses
• Early retirement years before Social Security or RMDs begin
• Years with high itemized deductions that offset the conversion income

For 2024, the conversion must be completed by December 31. The amount converted is added to your taxable income for the year, so model it carefully to avoid pushing yourself into a higher bracket than intended. Use the how federal tax brackets work guide to understand how much room you have in your current bracket before conversion income would jump to the next rate.

Move 6: Maximize HSA Contributions If Eligible

If you have a High-Deductible Health Plan (HDHP), you can contribute to a Health Savings Account (HSA) — one of the most tax-efficient accounts available. HSAs are triple tax-advantaged: contributions are deductible, growth is tax-free, and withdrawals for medical expenses are tax-free.

2024 HSA limits:

• Self-only coverage: $4,150
• Family coverage: $8,300
• Catch-up (55+): Additional $1,000

Unlike FSAs, HSA funds roll over indefinitely — there’s no use-it-or-lose-it pressure. But you can only contribute while enrolled in a qualifying HDHP, so make any remaining 2024 contributions before December 31 if you’re switching plans in January.

Move 7: Defer Income If You’re a Self-Employed Business Owner

W-2 employees have limited control over the timing of their income. But if you’re self-employed, freelance, or own a business, you have more flexibility:

• Defer invoicing: If you bill clients in late December for December work, delay billing so payment arrives in January 2025 — moving income to the next tax year
• Accelerate deductible expenses: Purchase business equipment, software, or supplies before December 31 to deduct them in 2024
• Section 179 and bonus depreciation: Equipment purchases up to $1,220,000 can be deducted immediately in 2024 under Section 179 rather than depreciated over years
• QBI deduction planning: Self-employed individuals may qualify for the 20% Qualified Business Income deduction — understand how year-end income affects your QBI calculation

Putting It All Together: A November-December Checklist

Action	Deadline	Typical Savings
Increase 401(k) to max $23,000	Last paycheck of 2024	$660–$2,300+ in taxes
Harvest tax losses	December 31, 2024	Varies by losses
Bunch charitable giving / DAF	December 31, 2024	Varies by bracket
Spend FSA balance	December 31 or plan deadline	$640–$5,000 in forfeited funds
Execute Roth conversion	December 31, 2024	Long-term tax-free growth
Max HSA contribution	April 15, 2025 (for 2024)	$1,000–$2,000 in taxes
Defer self-employment income	December 31, 2024	Varies by income level

Note: HSA contributions can be made until the tax filing deadline (April 15), so this one technically extends into 2025.

Year-end tax planning rewards those who act before the calendar closes. You cannot undo January 1 — decisions not made by December 31 become permanent for that tax year. Start with the 401(k) increase (the most universally applicable move) and work through the list based on your situation. Our compound interest calculator can help you model the long-term growth impact of maximizing tax-advantaged contributions consistently.