Time for Some Fall Financial Maintenance: Here's a Checklist

A woman rakes leaves in her yard, surrounded by colorful fall foliage.

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With the end of the year fast approaching, now is a good time to review your financial situation and check in on how you’re tracking toward your goals. Thoughtful year-end planning can help you set yourself up for success in the coming year.

Here are seven strategies to consider as you think about optimizing your finances before the end of 2024.

1. Maximize retirement contributions

One of the most impactful steps you can take is to review and maximize your retirement contributions. For traditional IRAs and Roth IRAs, contributions for 2024 must be made by Tax Day, which is April 15, 2025. For business owners, you can create and fund most employer-sponsored retirement plans through your tax-filing deadline, which includes extensions.

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The SECURE Act 2.0 introduced several changes to the contribution rules for IRAs and employer-sponsored retirement plans. You should consult your financial adviser and tax professional to determine how these changes might affect you and work with them to plan for your retirement contributions.

2. Take required minimum distributions (RMDs)

If you're 73 or older, you must take your RMDs from retirement accounts by December 31, 2024, to avoid penalties. You can defer your first RMD until April 1 of the year after you turn 73. Subsequent RMDs, however, must be taken by December 31 each year. So, if you turned 73 in 2024, you could defer your first RMD to as late as April 1, 2025—but then you’d have to take your 2025 RMD by December 31 of 2025, and there can be some downsides to taking two RMDs in one year.

Recent IRS regulations have also clarified RMD requirements for inherited IRAs. Starting in 2025, certain beneficiaries will need to take annual RMDs in addition to withdrawing the entire IRA by the end of the 10th year after the original owner’s death, so it’s important to discuss these complex rules with your adviser and tax professional.

3. Harvest your investment losses

Tax-loss harvesting can be a valuable strategy to offset capital gains taxes: By selling investments at a loss, you can reduce your taxable income. It’s important, however, to be mindful of the wash sale rule, which disallows the deduction if you repurchase the same or a “substantially identical” security within 30 days before or after the sale. Consulting a tax professional can help you navigate the nuances of these rules effectively.

4. Make year-end gifts

The annual use-it-or-lose-it gift tax exclusion for 2024 allows you to give up to $18,000 per recipient ($36,000 for married couples) without incurring gift taxes. If you exceed this amount, you can still make aggregate lifetime gifts up to $13.61 million ($27.22 million for married couples) without triggering gift or estate taxes, as of 2024. Note that under the terms of the Tax Cuts and Jobs Act of 2017, the unified credit for gift and estate tax will revert to pre-2018 levels at the end of 2025, so planning your gifts in advance can be advantageous.

5. Donate to charity

Charitable contributions can be a tax-efficient way to support causes you care about while reducing your taxable income. If you itemize deductions, you may be able to deduct charitable contributions up to a certain percentage of your adjusted gross income. Contributions of appreciated assets and securities can be particularly beneficial for some people, as you can deduct the fair market value and avoid capital gains taxes.

For those over 70½, making a qualified charitable distribution of up to $105,000 from an IRA can potentially be a tax-efficient way to meet RMD requirements while supporting charitable organizations (although note that you aren’t required to begin RMDs until you turn 73 if you were born between 1951 and 1959). These distributions are not income tax deductible, but the amount of your qualified charitable distributions (QCDs) that year is not included in your income.

6. Review your stock options

If your employer offers incentive stock options (ISOs) and you will not be subject to the alternative minimum tax (AMT) in 2024, consider exercising vested in-the-money options, which is when you purchase your company’s stock at a discounted rate, and therefore, are purchasing it at a profit. This can be a potentially tax-efficient move with little or no federal income tax consequences, depending on your specific situation. A tax adviser can help you determine the appropriate course of action.

7. Consult with advisers

Year-end planning can be complex, and the strategies that are right for you will depend on your individual circumstances. Consulting with a financial adviser or tax professional can help you navigate these decisions and set yourself up for success in the coming year.

The bottom line

The end of the year is an excellent time to review your financial situation and make strategic moves to check in with your goals. By considering these seven strategies and consulting with professionals, you can position yourself for financial success in 2025 and beyond.

JPMorgan Chase & Co., its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transaction.

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment advisor, member FINRA and SIPC.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Adam leads J.P. Morgan Wealth Management's Wealth Planning and Advice team, which is responsible for wealth planning, thought leadership and strategic planning for individual clients. This national team of former practicing lawyers provides experience in estate and tax planning strategies, retirement planning, restricted and control stock and stock option management, business succession planning, pre- and post-transactional planning, concentrated position management and other personal planning strategies. The team provides internal training to the J.P. Morgan Wealth Management sales force on these topics and also creates content for distribution to the public.