Ready or not, the end of the year is officially upon us. Your decisions between now and December 31 can significantly impact your tax bill next April. While time is running short, there are still plenty of smart tax moves to make now to reduce your tax burden and plan ahead.

Review your tax withholding

If you were surprised by a large tax bill last year — or aren’t sure where you stand — consider adjusting your tax withholding on your final paychecks. Increasing your withholding can help offset what you might owe or potentially generate a refund.

Start by using the IRS Tax Withholding Estimator to get a clearer picture of your current status. For the most accurate results, you’ll need a recent pay stub and your 2023 tax return. The IRS tool will tell you how much additional withholding you may need. From there, you can submit a new W-4 to adjust your withholding and avoid a tax shock next year.

Make charitable donations

Donating to a qualified charity before the end of the year allows you to reduce your tax bill, especially if you itemize. Both cash and the fair market value of non-cash contributions are deductible to qualified charities, but the donations must be made by December 31 to apply to your 2024 tax return.

Not sure if a charity you’re considering is eligible for a tax break? Check the charity’s status using the IRS Tax-Exempt Organization Search. Keep all records, including non-cash donation receipts and cash gift statements.

Remember, only those who itemize will benefit from the charitable deduction, so consider consulting a tax professional if you’re unsure.

Max out your retirement contributions

If you plan to maximize your retirement contributions but haven’t hit your target, there’s still time. For 2024, the 401(k), 403(b), and thrift savings plan contribution limit is $23,000, with an additional $7,500 catch-up contributions if you’re 50 or older.

Increasing contributions can reduce your taxable income while setting you up for a more secure retirement. Check with your plan administrator or HR department to ensure you’re on track without exceeding the limit. Consider using bonuses or year-end income to boost your contributions if possible.

Contribute to your health savings account (HSA)

If you have a high-deductible health plan, contributing to an HSA allows you to pay for qualified medical expenses tax-free. In 2024, the HSA contribution limit is $4,150 for individual coverage and $8,300 for family coverage.

Not only does an HSA provide an immediate tax break, but funds roll over year to year, allowing your balance to grow tax-free. At Chevron Federal Credit Union, we offer two types of HSAs to help you take advantage of these savings opportunities: our HSA Checking Account, which provides convenient fund access and earns dividends on balances over $500, and our HSA MarketEdge Money Market Account, with higher dividends on balances of $2,500 or more.

Ensure you’re within the IRS limits and your expenses are qualified to enhance your HSA’s tax advantages.

Maximize contributions to a flexible spending account (FSA)

If you have an FSA for healthcare or dependent care expenses, now is the time to ensure you’ve used up the balance, as most plans have a “use-it-or-lose-it” policy by year-end. Some employers may offer a grace period or allow a small rollover (usually up to $610 for healthcare FSAs in 2024), but anything over that amount will be forfeited if not spent.

Review your FSA balance and consider scheduling routine medical appointments, filling prescriptions, or purchasing eligible items like glasses or medical supplies to avoid leaving money on the table.

Contribute to a 529 college savings plan

If you’re saving for a child’s education, contributing to a 529 plan before the year ends can have tax benefits at the state level. While contributions to a 529 plan aren’t federally tax-deductible, many states offer deductions or credits for contributions made by state residents.

Even small contributions can add up over time and grow tax-free as long as withdrawals are used for qualified education expenses. This strategy helps with future education costs and can provide an immediate tax advantage on your state return, depending on your state’s policies.

Consider professional tax guidance

Year-end tax planning can be complex, with changing limits and rules that impact your financial picture. If you plan to itemize deductions, maximize tax-saving opportunities, or want a detailed review of your financial situation, consider consulting a tax professional. A qualified tax advisor can help you identify overlooked deductions, maximize credits, and avoid potential issues next year.