Checklist: 7 Financial tasks to complete before the end of the year.

1. Review and adjust your budget.

Analyze your spending over the past year, identify areas for improvement, and create a realistic budget for the new year. Examine your expenses in categories like housing, transportation, food and utilities. Check your progress toward reducing debt, saving for emergencies and achieving other financial goals. Consider any new expenses for the coming year and adjust your budget accordingly.

2. Review and max out retirement account contributions.

Contribute the maximum annual amount to your 401(k), IRA, or other retirement plan to reduce your taxable income. “Retirement plans give you the opportunity to pay yourself first, even before taxes in many cases,” according to Kevin Casteel, a financial planner with Commerce Trust. “Directing a portion of your pay toward these accounts not only helps with saving, but also budgeting and tax efficiency.” If you receive a workplace bonus check, use part of it to increase your account balance. If you meet age thresholds, take required minimum distributions (RMDs) from your retirement plans to avoid financial penalties.

3. Evaluate and optimize your tax situation.

Review your current tax position and explore strategies to potentially reduce your tax liability before year-end. “A little forward thinking about your income tax situation will ease tensions come filing time. Because some strategies must be implemented by year’s end, it’s best to plan ahead rather than scramble as April 15 approaches,” according to Casteel.

Consider how these options could help your situation:

• Tax-loss harvesting. Sell underperforming investments to offset capital gains.
• Strategic charitable donations. Make contributions to eligible organizations link opens in a new window to potentially qualify for tax deductions.
• Tax deductions and credits. Ensure you’re taking advantage of all applicable deductions and credits link opens in a new window, such as those for education expenses or energy-efficient home improvements.
• Timing of income and expenses. Defer income to next year or accelerate deductions into the current year. For example, if you’re self-employed, you might defer income by waiting to send end-of year invoices so that payments come in January instead of December. Or to accelerate deductions, you might pay for an equipment upgrade in December instead of waiting until January.

4. Spend any remaining funds in flexible spending accounts (FSAs).

Review current year FSA spending to help plan contributions for the upcoming year. Use any remaining balance in your account before the deadline, as these funds generally do not roll over to the next year. However, you might be eligible for a grace period or limited rollover. Check your plan to see if you qualify for these exceptions.

5. Review and update insurance policies and beneficiaries.

Are policy amounts sufficient and beneficiary designations up to date? Evaluate whether existing coverage still meets your needs, considering any life changes such as marriage, divorce or new children. Look for opportunities to save on annual insurance premiums by shopping around, bundling policies or adjusting deductibles.

6. Consider recent life changes.

If you’ve experienced major life events, like the addition of a family member or a child starting college, consider how these changes might impact various aspects of your finances. Such updates to your household could impact health insurance, estate planning, and income withholdings. The IRS Tax Withholding Estimator link opens in a new window can help you determine whether you’re withholding enough, too much or too little from your paycheck.

7. Set specific and measurable goals for next year.

Establish clear, measurable objectives for saving, debt reduction, or other financial priorities to guide your efforts in the new year. Instead of vague resolutions, create specific, actionable goals. For example, commit to transferring a set amount monthly into a high-yield savings account for a specific purpose, or plan to pay down a particular debt by a certain amount within a defined timeframe. Review your progress at least quarterly to stay on track.