Your Essential **Tax Tasks to Complete by December 31**: A Year-End Checklist

Estimated reading time: 10 minutes

A Very Narrow Window for Critical Tax Moves

Here we are, with only two days left before the calendar year closes! The clock is ticking, and December 31 is fast approaching. This isn’t just another date on the calendar; it’s a critical cutoff for many important financial decisions. If you’re looking to make smart tax moves and potentially lower your 2025 tax bill, you need to act now.

This guide will walk you through the essential **tax tasks to complete by December 31**. Our aim is to give you a clear **tax checklist for December 31**, helping you meet your **tax responsibilities by December 31** and get ahead. By understanding these **key tax tasks before year end**, you can ensure your financial house is in order.

Why **December 31st Tax Deadlines** Are So Important

December 31 isn’t just New Year’s Eve; it’s the final day for many significant tax-related actions for the year 2025. Think of it as the finish line for a tax marathon. This date marks the absolute last chance to claim certain deductions, make specific contributions, and complete required money distributions for the 2025 tax year.

Why is this particular date so critical? Because December 31 is “the absolute deadline for most tax-advantaged actions; missing it can forfeit deductions and credits,” as noted by MGOCPA (https://www.mgocpa.com/perspective/every-tax-deadline-your-business-needs-to-know-2025/). If you miss this crucial cutoff, those opportunities are gone forever, impacting your tax return for the entire year.

For example, most “deductible payments must be made by December 31 to be counted for the current year.” This means if you want to write something off on your 2025 taxes, you typically need to pay for it by the end of December. However, some special contributions, like those to an IRA, SEP, or Keogh plan, have later deadlines, often extending into the next tax filing season (https://saggioaccounting.com/blog/december-2025-tax-deadlines-essential-dates-you-need-to-know). Still, many **important tax actions end of year** must be completed by December 31.

The impact of missing these **December 31st tax deadlines** can be significant. You could lose out on valuable tax deductions, miss out on tax credits that save you money, and in some cases, even face penalties. That’s why understanding and completing these **final tax tasks of the year** is so crucial for your financial well-being.

The **Must-Do Tax Tasks Before Year End**: A Comprehensive Checklist

Below is your **tax checklist for December 31**, covering every **important tax action end of year** you should consider. This section outlines the **must do tax tasks before year end**, focusing on **tax actions for December deadline** that are essential. By tackling these **year end tax completion tasks**, you can significantly influence your 2025 tax outcome. Let’s make sure you complete your **final tax tasks of the year** smartly.

Maximize Tax Deductions & Credits

Making sure you claim all possible **tax deductions** and **tax credits** is a smart move to reduce your taxable income. This means less money goes to taxes and more stays in your pocket.

Health Savings Account (HSA) Contributions

A Health Savings Account (HSA) is a special savings account that helps you pay for medical costs. It comes with a “triple tax benefit” which means:

• Contributions are tax-deductible: The money you put in reduces your taxable income.
• Growth is tax-free: Any money your HSA earns through investments isn’t taxed.
• Withdrawals are tax-free: If you use the money for qualified medical expenses, you don’t pay taxes on it (https://www.youtube.com/watch?v=CP9Iy2dzrIw).

For 2025, you can contribute up to $4,150 if you have an individual health plan, or $8,300 if you have a family plan. If you’re 55 or older, you might be able to contribute an extra $1,000. It’s a wise move to try and max out your contribution before December 31 to get the full tax benefit for the current year.

Charitable Donations

Giving to charity isn’t just good for your heart; it can be good for your taxes too! When you make a charitable contribution, you can often deduct it from your income, which lowers the amount of tax you pay.

You can donate in two main ways:

• Cash Donations: These are deductible up to 60% of your Adjusted Gross Income (AGI).
• Appreciated Stock Donations: If you donate stocks that have grown in value, you can typically deduct their fair market value, up to 30% of your AGI. This is often a smart move because you avoid paying capital gains tax on the appreciated stock while still getting a deduction (https://www.youtube.com/watch?v=CP9Iy2dzrIw).

Make sure any gifts you plan to make are completed by December 31 to count towards your 2025 tax return. Remember to get a receipt for your **charitable giving**!

Medical Expenses

Did you have a lot of medical bills this year? You might be able to deduct them. If your total qualified medical expenses (this includes vision and dental care!) go over 7.5% of your Adjusted Gross Income (AGI), you can deduct the amount above that floor if you itemize your deductions.

To make sure these expenses count for 2025, you should pay any outstanding medical bills before December 31. This could help you reach that 7.5% threshold.

Business Expenses for Self-Employed Individuals

If you work for yourself or own a small business, many of your business-related costs can be deducted. These are known as **business write-offs**. Common deductible items include:

• Office supplies (like paper, pens, printer ink)
• Software subscriptions used for your business
• Travel costs for business purposes (like gas, flights, hotels)
• Professional development or training courses

Ensure that any such expenses are paid or officially accounted for (accrued) by December 31. This makes sure they are counted on your 2025 tax return, reducing your taxable business income.

Education Credits

Going to school or paying for someone else’s education can also provide tax benefits. There are two main **education credits**:

• American Opportunity Tax Credit: This credit can be worth up to $2,500 per eligible student for the first four years of higher education.
• Lifetime Learning Credit: This credit can be worth up to $2,000 for courses taken towards a college degree or to acquire job skills.

To qualify for these credits for 2025, make sure any qualified tuition and related expenses are paid before the year ends.

Remember, for many of these opportunities, “Deductible payments must be made by Dec 31 to count for the current year” (https://saggioaccounting.com/blog/december-2025-tax-deadlines-essential-dates-you-need-to-know). So, don’t delay!

Investment & Capital Gains/Losses Strategies

Your **investment tax strategies** can significantly impact your tax bill. Before the year ends, consider these actions related to your stocks, bonds, and other assets.

Tax-Loss Harvesting

**Tax-loss harvesting** is a smart way to manage your investments. It means selling investments (like stocks or mutual funds) that have lost money. The loss from these sales can then be used to “offset” or cancel out any capital gains (profits) you made from other investments. If your losses are more than your gains, you can even deduct up to $3,000 of that net capital loss against your ordinary income, like your salary (https://www.youtube.com/watch?v=CP9Iy2dzrIw).

Here’s how to do it:

• Identify losing positions: Look for investments in your portfolio that are currently worth less than what you paid for them.
• Sell before December 31: To count for 2025, you must sell these investments by the year’s end.
• Repurchase after 31 days: If you want to buy the same investment back, you must wait more than 30 days to avoid the “wash-sale rule,” which would disallow your loss.

This **market move** can significantly lower your capital gains tax.

Tax-Gain Harvesting

While not as common, **tax-gain harvesting** involves selling investments at a profit on purpose. This strategy is useful if you have a very low income year or large loss carryforwards from previous years. By realizing gains in a low-income year, you might pay little to no tax on those gains, and then you can repurchase the asset to establish a higher cost basis (https://www.youtube.com/watch?v=CP9Iy2dzrIw). This could save you money in future years when your income might be higher.

Qualified Charitable Distributions (QCDs)

If you are 70½ years old or older and have a Traditional IRA, you can make a Qualified Charitable Distribution (QCD). This means you can send money directly from your IRA to an eligible charity. You can donate up to $100,000 per year.

The great thing about a QCD is that it counts towards your Required Minimum Distribution (RMD) (we’ll talk about RMDs soon!). Plus, the money you donate directly from your IRA is excluded from your taxable income, which means you don’t pay taxes on that amount. This must be completed by December 31 (https://www.youtube.com/watch?v=CP9Iy2dzrIw).

Estimated Tax Payments

If you have income from investments, self-employment, or other sources not subject to regular payroll withholding, you likely need to make estimated tax payments throughout the year. Before December 31, it’s wise to double-check that your quarterly estimated payments for investment income are up-to-date. If you haven’t paid enough, you could face underpayment penalties (https://www.mgocpa.com/perspective/every-tax-deadline-your-business-needs-to-know-2025/). Making a final payment by year-end can prevent this.

Retirement Planning Contributions

Your **retirement contributions** are among the most powerful tools for reducing your current tax bill and building wealth for the future.

401(k) & 403(b) Contributions

Workplace retirement plans like a 401(k) or 403(b) allow you to save money for retirement while also getting a tax break. For 2025, you can contribute up to $23,500 to these plans. If you are 50 or older, you can contribute an extra “catch-up” amount of $7,500.

The important thing to remember is that contributions to these plans are usually made through your employer’s payroll. This means the money must be taken out of your paycheck and sent to your retirement account by December 31. There are no extensions after the year ends. As Gerber Co. advises, employer payroll windows “basically close their books for the year” on December 31 (https://www.gerberco.com/seven-tax-moves-to-make-before-2025-ends-year-end-tax-planning/). So, if you want to increase your **retirement savings** for 2025, you need to tell your employer now!

IRA Contributions

Individual Retirement Arrangements (IRAs) are another excellent way to save for retirement. There are two main types: Traditional IRAs and Roth IRAs.

For 2025, you can contribute up to $6,500 to an IRA. If you are 50 or older, you can add an extra $1,000 “catch-up” contribution. While you technically have until the tax-filing deadline (usually April 15 of the following year) to make your 2025 IRA contributions, it’s often a good idea to try and complete them by December 31. This can simplify your overall tax planning and ensure you don’t forget.

Required Minimum Distributions (RMDs)

If you have a Traditional IRA or other pre-tax retirement accounts, and you were born before January 1, 1952, you must start taking money out of these accounts once you reach a certain age. These are called Required Minimum Distributions (RMDs).

The rule is that you must take your RMD by December 31 of each year. If you fail to take your RMD, the penalty is very steep: 25% of the amount you were supposed to take out! In some special situations, this penalty can be reduced to 10% (https://www.taxpayeradvocate.irs.gov/news/tax-tips/your-tax-to-do-list-important-tax-dates/2025/05/). Saggio Accounting also highlights this deadline, emphasizing the severe penalty for non-compliance (https://saggioaccounting.com/blog/december-2025-tax-deadlines-essential-dates-you-need-to-know).

There’s one special rule: if you are turning 73 in 2025, you can delay your very first RMD until April 1, 2026. However, for all other years, the deadline is December 31.

Roth Conversions

A Roth conversion involves moving money from a pre-tax retirement account (like a Traditional IRA) into a Roth IRA. When you do this, the money you move becomes taxable income in the year of the conversion. However, once the money is in your Roth IRA, all future growth and qualified withdrawals in retirement are completely tax-free.

You might consider a Roth conversion if you believe your current tax rate in 2025 is lower than what you expect it to be in retirement. By paying the tax now, you could save more in the long run. This is a complex decision that should be discussed with a tax professional, and it must be completed by December 31 to count for the 2025 tax year (https://www.youtube.com/watch?v=CP9Iy2dzrIw).

Income Review & Withholding Adjustments

A careful **income tax planning** review before December 31 can prevent surprises later. It helps you understand your total earnings and make any necessary adjustments to your tax payments.

Pro Forma 2025 Return

Before the year officially closes, it’s a great idea to have a tax professional create a “pro forma” or “what-if” 2025 tax return. This is an estimated tax return that uses your income and deductions up to this point in the year, plus any expected changes. It helps you estimate your final tax liability and identify any potential gaps or areas where you could save more. As J.P. Morgan Private Bank suggests, this helps you get a clear picture of your tax situation (https://privatebank.jpmorgan.com/nam/en/insights/markets-and-investing/ideas-and-insights/5-year-end-tax-planning-actions-to-take-before-2026).

Year-to-Date Income Verification

Take some time to look at all your income sources from January 1 to December 31, 2025. This includes:

• W-2 forms from your employer
• 1099-NEC for freelance or contract work
• 1099-INT for interest income
• 1099-DIV for dividend income
• Schedule K-1 for partnership or S-Corp income

Making sure you’ve accounted for all your **earnings** will give you a clear picture of your total income for the year.

Accelerate or Defer Income

Depending on your estimated tax situation for 2025 and your outlook for 2026, you might consider accelerating or deferring income.

• Accelerate Income: If you expect to be in a lower tax bracket in 2025 than in 2026, you might want to bring some income into 2025. For example, if you’re self-employed, you could invoice clients earlier to receive payments before December 31.
• Defer Income: If you expect to be in a higher tax bracket in 2025, you might want to push some income into 2026. This could mean delaying a bonus payment until January 1, 2026.

This **earnings management** can be a powerful way to smooth out your taxable income over multiple years.

Withholding Check

Your tax withholding is the amount of money your employer holds back from your paycheck to pay your income taxes. It’s a good idea to review your withholding, especially if your income or life situation (like getting married, having a baby, or getting a new job) has changed this year.

The IRS offers a “Tax Withholding Estimator” tool on their website that can help you adjust your W-4 form. Making sure your withholding is accurate for 2026 can prevent you from owing a lot of money at tax time or from getting too large a refund (which means you overpaid throughout the year). Keystone CPA emphasizes adjusting your W-4 before year-end to ensure proper withholding (https://keystone.cpa/2025/12/15/wrapping-up-the-year-five-tax-tasks-to-consider-before-december-31/).

Tax Record Keeping & Documentation

Good **tax record keeping** is like having a tidy home for your financial papers. It makes tax season much smoother and ensures you don’t miss any important information.

Organize Receipts

Start gathering all your receipts for tax-deductible expenses. It’s helpful to create digital folders on your computer or cloud storage (or physical folders) for different categories, such as:

• “Charitable Gifts”
• “Medical Expenses”
• “Business Costs”
• “Education Payments”

Having your **tax documents** neatly organized will save you a lot of time and stress when you prepare your return.

Retain Important Forms

As you receive financial statements, make sure to keep copies of important tax forms. These include:

• Form 1098-E (for student loan interest)
• Form 1098-T (for education tuition)
• Form 5498 (for IRA contributions)
• Form 1099-R (for distributions from retirement plans, like RMDs)

Having these **financial records** in one easy-to-find location will be incredibly helpful for you or your tax preparer.

Prepare for Filing

Before the official tax season begins, consider creating a simple checklist of all the documents you expect to receive. This way, when you start using tax software or working with a professional, you can easily verify that you have everything you need. This proactive **record organization** helps ensure a complete and accurate tax return.

Why These **Year-End Tax Planning Benefits** Matter

Completing these **final tax tasks of the year** isn’t just about crossing items off a list. It provides real and lasting **tax benefits** for your financial future.

Compliance & Penalty Avoidance

First and foremost, acting before December 31 helps you stay compliant with tax laws and avoid costly penalties. For instance, as the IRS Taxpayer Advocate highlights, “Missing an RMD can trigger a 25% penalty (reduced to 10% under certain hardship exceptions)” (https://www.taxpayeradvocate.irs.gov/news/tax-tips/your-tax-to-do-list-important-tax-dates/2025/05/). No one wants to pay extra money to the IRS because they missed a deadline! Proactive planning helps you sidestep these financial pitfalls.

Tax-Saving Potential

By strategically utilizing deductions, making retirement contributions, and implementing investment strategies like tax-loss harvesting, you unlock significant **tax-saving** potential. These moves can directly reduce your taxable income, leading to a lower tax bill or a larger refund. It’s about being smart with your money and making sure you pay only what you truly owe.

Stress Reduction for the Upcoming Filing Season

Imagine entering tax season without a pile of messy receipts or the worry of missed deadlines. Completing your **year end tax completion tasks** now significantly reduces the stress and frantic rush often associated with tax preparation. You’ll be organized, prepared, and confident, positioning yourself for a stronger financial start in 2026. This proactive approach improves your overall **financial health** and peace of mind.

Quick Recap & Next Steps: What **Tax Tasks to Do by December 31**

With the clock ticking, let’s quickly recap the most crucial **immediate tax actions** you should consider before December 31. These are the **must do tax tasks before year end** that can’t wait.

Here’s your **final checklist** for the next two days:

• Make Maximum 401(k)/403(b) Contributions: Ensure any final contributions through your payroll are made.
• Pay Deductible Expenses: Settle outstanding bills for property taxes, medical costs, and charitable donations to claim them for 2025.
• Complete Required Minimum Distributions (RMDs): If you’re 70½ or older, take out your RMD from your retirement accounts.
• Execute Tax-Loss Harvesting: Sell losing investments to offset capital gains or up to $3,000 of ordinary income.
• Contribute to HSA & IRAs: Maximize your Health Savings Account (HSA) contributions for 2025. While IRA contributions can be made later, finishing them now is good practice.
• Review Withholding & Adjust W-4: Use the IRS estimator to ensure your 2026 withholding is accurate.
• Gather and Organize All Supporting Documents: Get your financial paperwork in order for a smoother tax season.

Given the very tight deadline, we strongly advise you to schedule a quick 15-minute call with your CPA or tax advisor before midnight on December 31. They can help confirm nothing is missed and ensure all your **quick tax steps** are correctly implemented.

Common Mistakes to Avoid

Don’t let these simple errors cost you money or cause headaches! Be aware of these common pitfalls:

• Forgetting to Claim Charitable Stock Donations: You get a deduction and avoid capital gains tax. Don’t just give cash if you have appreciated stock!
• Assuming IRA Contributions Can Wait: While you have until April 15, making them by Dec 31 simplifies planning and ensures you don’t forget.
• Missing the RMD Deadline: The 25% penalty is steep and easily avoidable by taking action before year-end.
• Ignoring a Pro Forma Tax Return: This “what-if” projection can reveal big tax-saving opportunities *before* it’s too late.
• Not Organizing Receipts Throughout the Year: Trying to find all your documentation in April is stressful and can lead to missed deductions.

Conclusion

With only two days left, these **tax actions for December deadline** can’t wait. The window to make these financially savvy moves for your 2025 taxes is closing fast. Remember, many of these opportunities are “use it or lose it.” Take advantage of these **key tax tasks before year end** now, or you’ll lose them forever.

Don’t let this chance slip away. Be proactive, review your situation, and take action immediately. For personalized advice and to ensure you maximize your benefits, it’s always best to contact a qualified tax professional.

Download Your Free Year-End Tax Checklist

Frequently Asked Questions

What is the absolute last day to make tax-deductible contributions to a retirement account?

For workplace retirement plans like 401(k)s and 403(b)s, contributions must be made through payroll by December 31. For IRAs, you have until the tax filing deadline (typically April 15 of the following year) to make contributions for the current tax year, but it’s often best to do it by December 31.

Can I still claim medical expenses if I pay them after December 31?

No, for medical expenses to be deductible in the 2025 tax year, they must be paid by December 31, 2025.

What happens if I miss my Required Minimum Distribution (RMD) deadline?

If you fail to take your RMD by the December 31 deadline, you could face a penalty of 25% of the amount you were supposed to withdraw. This penalty can sometimes be reduced to 10% under specific circumstances.

Is tax-loss harvesting only for people with a lot of investments?

Not necessarily. While those with larger portfolios might see more significant benefits, tax-loss harvesting can be a useful strategy for any investor who has realized capital losses and wants to offset capital gains or even ordinary income up to $3,000.

Can I contribute to an HSA and deduct it on my 2025 taxes if I open the account in December?

Yes, you can open an HSA account up until December 31 and make contributions for the 2025 tax year. The contributions are deductible, and you can use the funds for qualified medical expenses.