Get ready, it’s almost “New Year, New Me” season! 🥳 Time to get those hanging clothes off the treadmill and start telling your friends about the 2025 diet you’ll be on…for the first two weeks of January! 🤪
Before we dive into 2025, make sure your financial and tax ducks are in a row. 🦆 Check out this nifty guide and hop to it. 👇
Here’s Five Fast Facts on end-of-the-year financial tips:
- 🎩 Top Me Off - Have a workplace retirement plan? Toss in a bit extra before year’s end—it could lower your 2024 tax bill. Under 50? You can contribute up to $23,000 to your 401(k). Over 50? You get a bonus $7,500. IRAs (traditional or Roth) are more relaxed; you’ve got until April 2025 to stash up to $7,000 (or $8,000 if you’re 50+).
- 💳 Use It or Lose It - Flexible Spending Account funds don’t roll over unless your employer offers a grace period. Use them by December 31, or say goodbye to your hard-earned cash. Cover co-pays, deductibles, or splurge on contact lenses, OTC meds, or hearing aids. Just don’t let it vanish into the FSA void.
- ✍️ It’s a Write-Off, Jerry! - Most Americans take the standard deduction on their tax return. However, if you’re itemizing, now’s the time to lower your tax bill by increasing deductions, like donating to your favorite charity. Did you know that you can also deduct expenses from major surgeries or chronic medical conditions? If you have unreimbursed medical expenses that exceed 7.5% of your adjusted gross income, you may be eligible.
- 💸 It’s Giving - ‘Tis the season for giving! Want to reduce your estate? You can gift up to $18,000 per person tax-free this year. Covering a loved one’s medical bills or tuition? Pay the institution directly, and there’s no limit! It’s the gift that keeps on giving—literally.
- 💡 Know What You Owe - Wondering if you’ll owe the IRS this year? Check out the IRS’s Tax Withholding Estimator and find out. Make sure you have a recent pay stub and a copy of your 2023 tax return so you get an accurate income estimate. If you owe, the tool will tell you how much extra withholding to put down on line 4(c) of Form W-4 to catch you up on withholding for the year. Early next year, complete another W-4 for withholding in 2025.
🔥Bottom line: One thing’s for sure: when your money I’s are dotted and T’s are crossed, you’ll sleep a whole lot easier. While we’re talking taxes, we’re seeing a bunch of possible changes in our crystal ball. Get ahead of the game and read this article where we break it all down.
Got any more year-end money tips?
Let us know by connecting with us on Facebook and Instagram! Also, remember to share this newsletter with your friends & coworkers!
Btw, If you’ve read this far and haven’t yet signed up for the weekly Paycheckology newsletter, CLICK HERE!
