The end of the year is fast approaching, and you know what that means—it’s time to think about taxes. Before you roll your eyes or groan, you should know that tackling year-end tax planning with a knowledgeable financial advisor can save you more than just headaches; it can save you money. And let’s be honest—who doesn’t want to keep more of their hard-earned cash?

According to a survey by Nextdoor, 64% of U.S. adults feel stressed about tax season, and for good reason. But you can tackle this stress monster with the help of a financial advisor. 83% of people working with financial advisors feel less stressed about their finances. So, why not join them?

Why Does Year-End Tax Planning Matter, Anyway?

Okay, let’s cut to the chase—taxes aren’t going anywhere. In 2023, 60% of Americans thought their income taxes were too high, up from 54% the previous year. Year-end tax planning isn’t just some fancy financial phrase; it’s a real opportunity to reduce tax liability, boost tax deductions, and give yourself some financial flexibility. Take this opportunity to review your finances, find potential savings, and start the new year feeling on top of your game.

Want to Keep More Money? Start Here:

If you want to be one of the few who aren’t scrambling at the last minute, here’s where you should start with your financial advisor.

1. Max Out Those Retirement Contributions

Don’t leave free money on the table. Have you fully funded your 401(k) or IRA this year? If not, now’s your chance to do it. Around 70 million Americans are using 401(k) plans. By stuffing as much as possible into these tax-advantaged accounts, you’re saving for your future and shaving down your taxable income for this year. Check the 401k contribution and catch up limits to see how far you need to go to max out for this year. 

2. Think About a Roth Conversion

The idea of a Roth IRA conversion might sound like financial jargon, but let’s break it down. If you think you’ll be in a higher tax bracket down the road, converting some of your traditional IRA into a Roth IRA could be a smart move. Sure, you’ll pay taxes now, but your future self will thank you when those earnings come out tax-free. A financial advisor can help determine if this strategy makes sense for you.

3. Turn Those Losses into Gains with Tax-Loss Harvesting

We all have those investments that didn’t quite work out this year. Why not turn them into a win?  By selling off your underperforming assets, you can offset some of your capital gains tax and reduce your overall tax liability. But keep an eye on the wash sale rule—you don’t want the IRS knocking on your door because you repurchased the same (or similar) asset too quickly. Your advisor will keep you on track.

4. Get a Tax Break through Charitable Contributions

You could score some sweet tax deductions by making charitable contributions before December 31. And if you’re looking to give big, consider setting up a donor-advised fund. It’s a fancy way of giving to your favorite charities down the road while snagging a tax deduction right away.

5. Don’t Sleep on Your Health Savings Account (HSA)

If you have a high-deductible health plan, maxing out your HSA contributions can save you some serious cash. In 2024, you can stock away as much as $8,300 in your HSA. This little gem offers a triple tax benefit—tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. 

6. Don’t Forget About Estate and Gift Taxes

Estate and gift taxes might not be on your radar, but they should be. The annual gift tax exclusion lets you give up to $18,000 per person in 2024 without triggering the gift tax. If you’re feeling extra generous (and strategic), this is a great way to reduce your estate’s taxable value over time. 

The Aligned Perspective: Year End Tax Planning

Taxes may not be the most exciting thing to consider as you’re wrapping up the year, but taking a proactive approach can make a difference. Preparing now means fewer headaches, less stress, and possibly more money in your pocket come tax time. And let’s face it, walking into the new year with your financial house in order feels pretty darn good. With a little planning and some help from a trusted financial advisor, you can confidently tackle your tax monster.