The winter months are filled with joy as the holiday season approaches, but there are also a number of things to think about as the end of the year approaches. This time of year, can feel overwhelming, but our team at West Michigan Advisors is here to support you wherever we can. To help you prepare for the end of the year we would like to provide you with a checklist of items to keep at the forefront of your mind. To be certain you aren’t paying more than you need, to reduce tax liabilities, and to feel a sense of ease going into the end of the year, consider the following topics.

Retirement Planning

IRA/401(k): Contribute up to $7,000 ($8,000 if 50+) in your IRA, $23,000 ($30,500 if 50+) in your 401(k) to reduce taxable income. For 2025, IRA contributions will stay the same while 401(k) base is $23,500 ($31,000 for 50+)
Roth Conversion: Convert traditional IRA/401(k) funds to Roth if you are expecting higher taxes later in life. We can discuss if this is the right approach for you.
Backdoor Roth: High earners may be able to use this strategy for Roth contributions even if they are above the earnings limits.

Required Minimum Distributions (RMDs)

If you turned 73 in 2024, be sure to take all your Required Minimum Distributions before the end of the year to avoid paying more than necessary. Consider using strategies such as charitable donations to reduce your tax liabilities.

Charitable Contributions

Qualified Charitable Distributions: Donate up to $105,000 from your IRA if you need to satisfy RMDs and reduce taxable income.
Donor Advised Funds: Donate now, choose charities later, and receive immediate tax benefits.
Stock Donations: Donate appreciated stocks to avoid capital gains tax and receive a deduction.

Itemized Deduction Bunching

Consolidate deductions (e.g., charity, medical expenses) into one year to exceed the standard deduction and maximize tax benefits.

Medical Expenses

Deduct medical expenses if they exceed 7.5% of your Adjusted Gross Income. Consider scheduling medical procedures before year-end to meet this threshold.

Gain & Loss Harvesting

Offset gains in your taxable accounts by selling losing investments or harvest gains in low-income years for tax benefits.

Education Planning

Contribute to a 529 plan for your children or grandchildren for potential tax-free growth and state tax benefits. Consider the 5-year funding strategy for accelerated savings.

Estimated Taxes & Withholding

Review estimated tax payments to avoid underpayment penalties, especially if you’re self-employed. Click here for the IRS page regarding estimated taxes.

The end of the year can be a stressful time, but it doesn’t need to be. If you have questions about any items on this checklist, don’t hesitate to set up a meeting with one of our advisors. We want to be there for you so you can focus on the things that truly matter to you this holiday season!

The material has been gathered from sources believed to be reliable, however West Michigan Advisors cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. To determine which investments or planning strategies may be appropriate for you, consult your financial advisor or other industry professional prior to investing or implementing a planning strategy. This article is not intended to provide investment, tax or legal advice, and nothing contained in these materials should be taken as such. Investment Advisory services are offered through West Michigan Advisors. Advisory services are only offered where West Michigan Advisors and its representatives are properly licensed or exempt from licensure. No advice may be rendered unless a client agreement is in place.

How to Prepare for the End of the Year