2024 Year-End Planning Guidelines

As you prepare to say “goodbye” to 2024 and “hello” to 2025, here are a few smart financial planning moves to consider:

1. Make 2024 Contributions to IRAs (Individual Retirement Accounts)
When? Before you file your taxes.

If it’s part of your financial plan, consider “maxing out” your IRA by 12/31. This means contributing the maximum allowable contribution: $7,000 if under age 50, and $8,000 if age 50 or above. If you don’t have the cash flow to contribute by 12/31, don’t worry! Just make sure you do so before you file your taxes next year.

2. Make 2024 Contributions to HSAs (Health Savings Accounts)
When? Before 12/31.

If it’s part of your financial plan, consider “maxing out” your HSA by 12/31. This means contributing the maximum allowable contribution: $4,150 for individual coverage or $8,300 for family coverage. Be sure to include any HSA contributions made by your employer when calculating your eligible contribution amount. If you are not contributing to your HSA via payroll deductions, you have until you file your taxes to make the contribution.

3. Make 2024 Contributions to 529 Education Accounts
When? Before 12/31.

For clients living in and contributing to 529s in states with a state income tax deduction for contributions (like Ohio), be sure to contribute to those plans before 12/31 to claim this year’s deduction.

4. Perform Conversions from Traditional IRA to Roth IRA
When? Before 12/31.

For those that are planning to do the Backdoor Roth strategy, make the conversion from Traditional to Roth IRA by 12/31 in order to incur any applicable tax in the current year. As a Commas client, your advisor will perform the Backdoor Roth Conversion for you on accounts that we manage!

5. Take your Required Minimum Distributions from Retirement Accounts
When? Before 12/31.

If you own a Traditional IRA or 401(k) and you have reached the age of 73, you must take your Required Minimum Distribution by 12/31. If you forget to take the distribution by the deadline, you may be subject to a 25% penalty on the shortfall.

As a Commas client, your advisor will make sure that you’ve taken distributions from the necessary accounts that we manage!

6. Own a Small Business? File the Beneficial Ownership Information Report (BOIR)
When? Before 12/31.

Effective January 1, 2024, all existing and newly created small business entities will be required to file a beneficial ownership report to the Financial Crimes Enforcement Network (FinCEN) as part of the new Corporate Transparency Act. Please visit https://www.fincen.gov/boi for more information, including information regarding whether your small business entity is required to file, how to file, and a link to the BOIR online filing system. If you have any further questions, please reach out to your advisor.

7. Donate to Charity
When? Before 12/31.

Donating to charity is an incredible way to support your community. It could also be a smart way to avoid capital gains taxes. Additionally, if you itemize your taxes instead of taking the standard deduction, charitable donations could enable you to deduct even more!

8. Check Your Beneficiaries
When? Once annually.

It’s a good practice to check your beneficiaries on your accounts at least annually. A beneficiary will receive the funds in your account if you pass away. To check your beneficiaries on accounts, log onto your account’s custodian online to verify.

9. Line Up a Tax Specialist for Filing your Taxes
When? By January.

Consider working with a tax professional, such as a CPA or EA, for your tax preparation. Not only will working with a tax professional make sure your taxes are filed accurately and on time, but it will save you time and reduce stress. If you’re interested in working with a tax professional and want a referral, please reach out to your advisor.