As the end of the year rapidly approaches, it’s essential to focus on tax and financial planning strategies that can significantly reduce your tax liability and enhance your financial position. The holiday season, with its myriad of obligations and distractions, often leads to overlooked opportunities and mistakes. Acting before December 31st ensures you take full advantage of the available benefits.

Common Oversights and Mistakes to Avoid

1. Failing to Maximize Retirement Contributions Contributing to employer-sponsored retirement plans such as a 401(k), 403(b), or 457(b) offers a double benefit: building your retirement savings and reducing your taxable income. For 2024, contribution limits are $23,000 for individuals under 50 and $30,500 for those 50 and older, with additional opportunities for catch-up contributions in specific plans. Contributions must be made before year-end, as under-contributions cannot be corrected retroactively.
2. Improper Timing of Capital Gains and Losses Capital gains and losses are classified as short-term or long-term based on the holding period. Strategic selling of assets can offset gains with losses, reducing taxable income. Long-term gains enjoy favorable tax rates of 0%, 15%, or 20%, while short-term gains may be taxed up to 37%, plus a 3.8% surtax for high-income earners. Be mindful of the “wash sale rule” when selling at a loss to avoid disallowed deductions.
3. Overlooking Alternative Minimum Tax (AMT) Considerations The AMT, although affecting fewer taxpayers due to recent legislation, can still be burdensome. Strategies to mitigate AMT include:
   • Paying state and real estate taxes only when due.
   • Delaying the exercise of incentive stock options.
   • Ensuring municipal bond investments are AMT-exempt.
4. Missing Required Minimum Distributions (RMDs) If you are 73 or older, or inherit certain IRAs, you are required to take RMDs from traditional retirement accounts. Failing to do so can result in a 25% penalty on the amount not withdrawn. Ensure compliance to avoid costly penalties.
5. Underutilizing 529 Education Savings Plans Contributions to a 529 plan for 2024 can reach $18,000 per person, per beneficiary. The five-year forward rule allows up to $90,000 in a single year, providing estate planning benefits and tax-free growth. These plans are excellent tools for funding future educational expenses.
6. Neglecting Health Savings Account (HSA) Opportunities HSAs offer tax-free contributions, growth, and withdrawals for qualified medical expenses and long-term care insurance premiums. While balances roll over annually, it’s important to use HSA funds strategically to maximize tax advantages.
7. Forgetting Year-End Gifting The annual gift tax exclusion for 2024 is $18,000 per recipient. Gifting appreciated assets to individuals in lower tax brackets can create tax savings, while gifts through an Irrevocable Life Insurance Trust (ILIT) offer estate planning benefits.
8. - You  can use losses from stocks to offset gains from cryptocurrency investments, as both are generally considered capital assets for tax purposes. Discuss with your licensed professional.
9. Disasters, Casualty and Thefts - If you have losses or thefts of investment or business assets, you may be able to claim those casualty losses on your 1040. Discuss with a licensed professional. If you life in a area that is designated as a Disaster, you may be able to claim personal losses as well.
10. QPA - If you're a qualified performing artist, you may deduct certain expenses directly on Form 1040, Schedule 1, Line 10 ("Adjustments to Income"), bypassing Schedule C. Discuss with your tax professional.
11. Sponsorships and Marketing Deductions - If you have certain organizations that you want to sponsor as a business or company, that type of advertising is a business expense and good marketing also. (e.g., displaying your logo, mentioning your brand in materials).

Proactive Action Steps for Year-End Success

1. Evaluate and Adjust Retirement Contributions Ensure you’ve maximized contributions to your 401(k) or similar plans before December 31st. Take advantage of employer matching programs to enhance your savings.
2. Review Your Investment Portfolio Analyze your gains and losses, and consider strategic sales to offset income. Verify compliance with the wash sale rule to avoid disallowances.
3. Be Mindful of Potential AMT Exposure Consult with a tax professional to determine AMT liability and adjust payments or investment holdings as necessary.
4. Schedule and Verify RMDs Ensure you’ve met the RMD requirements for all applicable accounts. Automate withdrawals if necessary to prevent future oversights.
5. Fund Education Savings Plans Make contributions to 529 plans before year-end to maximize the tax-free growth and gifting benefits.
6. Leverage HSAs Use HSA funds for eligible expenses and ensure contributions align with annual limits. Take advantage of tax-free benefits while building reserves for future medical needs.
7. Optimize Gifting Strategies Consider gifting cash or appreciated assets to reduce your taxable estate and provide tax advantages for recipients.

Conclusion

By addressing these critical areas, you can reduce your tax liability and improve your financial standing. Procrastination often results in missed opportunities, so act now to secure your financial future. Consult with a tax professional to tailor these strategies to your specific circumstances and ensure compliance with IRS regulations. Don’t leave money on the table—strategic planning today can yield benefits for years to come.

Disclaimer: Remember to Discuss with a licensed local professional before making any important decision.

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Commissioner George Mentz JD MBA CILS CWM® is the first in the USA to rank as a Top 50 Influencer & Thought Leader in: Management, PM, HR, FinTech, Wealth Management, and B2B according to Onalytica.com and Thinkers360.com. George Mentz JD MBA CILS is a CWM Chartered Wealth Manager ®, global speaker - educator, tax-economist, international lawyer and CEO of the GAFM Global Academy of Finance & Management ®. The GAFM is a EU accredited graduate body that trains and certifies professionals in 150+ nations under standards of the: US Dept of Education, ACBSP, ISO 21001, ISO 991, ISO 29993, QAHE, ECLBS, and ISO 29990 standards. Mentz is also an award-winning author and award winning graduate law professor of wealth management of one of the top 30 ranked law schools in the USA.