November–December 2024: Year-End Tax Prep Tips
1. Organize Your Financial Records
Why It’s Important: Gather documents now to avoid a scramble in the new year. Freelancers and small business owners should focus on tracking income and deductible expenses, like business-related travel, equipment, and professional services.
Action Steps:
- Organize receipts and invoices by category.
- Review bank statements for business expenses you may have overlooked.
- Use accounting software or consult with a professional to streamline this process.
2. Maximize Tax-Deferred Contributions
Why It’s Important: Contributions to tax-deferred accounts reduce your taxable income. Consider topping off your contributions to accounts like a 401(k), traditional IRA, or Health Savings Account (HSA) before the year-end deadline.
Action Steps:
- Check your current contribution levels and see how much room you have before hitting annual limits.
- Make a final contribution to your IRA or HSA by December 31 to potentially reduce your 2024 tax bill.
Quick Tip: Not sure how much to contribute to see a meaningful tax benefit? Schedule a tax planning session with DownieTax to get a tailored strategy.
3. Complete Year-End Tax Planning
Why It’s Important: Year-end tax planning is essential to make sure you’re not leaving any potential savings on the table. A professional review can identify deductions, credits, and strategies tailored to your specific situation—whether you’re a freelancer, a small business owner, or an individual taxpayer.
Action Steps:
- Review your taxable income and plan for adjustments (like accelerating certain expenses or deferring income).
- Check eligibility for credits like the Earned Income Tax Credit or American Opportunity Credit.
- Evaluate whether to make additional charitable donations before December 31 for a tax deduction.
CTA: Don’t let tax savings slip by! Book a tax planning session with DownieTax and finish the year with a clear strategy for 2024 and 2025.
Key Tax Deadlines in 2025 for Individuals and Small Business Owners
Staying on top of these deadlines will keep you organized, prepared, and penalty-free.
1. January 15, 2025: Final Estimated Tax Payment for 2024
For Whom: Freelancers, contractors, and small business owners who make quarterly estimated payments.
Action Steps:
- Calculate your total estimated taxes for 2024 and make any final adjustments.
- Pay your fourth-quarter estimated taxes to avoid penalties.
Quick Tip: If you plan to file your 2024 tax return and pay any balance by January 31, you can skip this final estimated payment.
2. January 31, 2025: W-2 and 1099 Forms Should Arrive
By January 31, employers and payers must provide W-2s and 1099s for income earned in 2024. You’ll need these forms for accurate filing.
Action Steps:
- Check your mail or email for W-2 and 1099 forms.
- Contact employers or payers if you don’t receive these by early February.
Quick Tip: If you’re self-employed, remember to send out 1099 forms to contractors you paid over $600 in 2024.
3. April 15, 2025: Individual Tax Filing Deadline (April 18 for 2025)
Action Steps:
- File your return or extension request by April 15 (April 18 for 2025 due to the weekend).
- If you owe, make a payment by this date to avoid interest and penalties.
4. June 17, 2025: Second Estimated Tax Payment Due
Action Steps:
- Review your income and expenses so far in 2025.
- Calculate and submit the second installment of your estimated taxes.
5. September 16, 2025: Third Estimated Tax Payment Due
6. October 15, 2025: Final Deadline for 2024 Taxes (if Extension Filed)
Action Steps:
- Double-check your extension details.
- File by October 15 to avoid additional penalties.
Wrapping Up
Navigating tax deadlines can be straightforward with a proactive approach. Between now and December 31, take steps to organize your records, maximize contributions, and finalize tax planning to set yourself up for a smooth tax season. Staying ahead of key deadlines in 2025 will keep you compliant, lower stress, and help you avoid penalties.
Ready for a more organized tax season? Schedule your tax planning session with DownieTax today, and we’ll make sure you’re prepared for every deadline, maximizing every possible tax benefit.
