Ask Kim: Contributing To Your Retirement Plans By The End Of The Year

Posted on December 3, 2024

Dear Kim,


Merry Christmas Kim! I have a two-part question for you as 2024 winds down. I realized that I haven’t taken the time to maximize my catch-up contributions to my IRA and 401k plans. I think I have until December 31st to do it. My second question involves any other tax saving tips you may have. I am planning on making my annual charitable contributions this month, both as donations and cash. Any other ideas you may want to share?



Merry Christmas from the HEAT Tax Miser!

Dear HEAT Tax Miser,

I’m glad to hear you’re eager to maximize your contributions! Here is some important information to help you stay on track:

  • 401(k) Contributions: These need to be made by Tuesday, December 31, 2024, in order to count for the current year. Be sure to complete them before the end of the year!
  • IRA Contributions: You have until Tax Day (Tuesday, April 15, 2025) to fully contribute to your IRA.

As for charitable contributions, they’re a great way to lower your taxes. However, don’t wait until December 31st to make your donations. To ensure the contribution counts for this year, it must be postmarked by December 31st. But if you can send it earlier, that’s even better—just to be safe!

Also, keep in mind that if you plan to itemize deductions on your tax return, you’ll need to file using the long form (1040 or 1040A). Make sure your total deductions, including charitable contributions, exceed the standard deduction to make itemizing worth your time.

Since I’m not a tax advisor, I’ll stop right here. I would recommend reaching out to your tax planner to get guidance on any further tax planning tips prior to the end of the year.

Wishing you and yours a very Merry Christmas!

Best,
Kim

If you need help navigating your finances, talk to Kim Spencer by clicking the link below!

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