Tax Moves Before December 31

Moves that REQUIRE action by 12/31

• Solo 401(k) — employee deferral elections and the plan itself must be established by 12/31
• Equipment purchases — assets must be purchased AND placed in service by 12/31 to qualify for Section 179 / bonus depreciation
• S-Corp owner W-2 payroll — final reasonable comp run must be processed before year-end payroll cutoff
• Charitable gifts — checks must be mailed (postmarked) and credit card donations charged by 12/31
• Tax-loss harvesting trades — must settle in the current tax year (watch the wash-sale rule)
• Roth conversions — must be completed by 12/31; unlike IRA contributions there is no April extension

Moves with a longer runway (good to start in December)

• Traditional/Roth IRA contributions — deadline is the April filing date
• SEP-IRA contributions — deadline extends to the extended return deadline
• HSA contributions — deadline is the April filing date
• Prior-year estimated tax shortfall — pay before 1/15 to limit underpayment penalties

Income and expense timing

Cash-basis taxpayers can shift taxable income by controlling when invoices are sent and when bills are paid. Defer December billing into January to push income, or prepay deductible expenses (rent, insurance, software annual plans) to pull deductions forward.

• Delay December invoicing into January (defer income)
• Prepay 12 months of recurring expenses before 12/31 (accelerate deductions)
• Run end-of-year bonuses and accrue payroll taxes properly

Documentation to finalize before the year flips

• Collect W-9s from every contractor you'll 1099
• Confirm mileage log is current through December
• Document business purpose for late-year meals, travel, and gifts
• Reconcile bank, credit card, and loan accounts through November at minimum