A year-end financial checklist: 2023 complete guide

The end of the year is a time to make critical planning decisions for your taxes, investments, and savings. It's also a time to reflect on the previous year and consider what may change in the year ahead.

Now is the time to create a personalized and proactive strategy that dynamically evolves to meet your needs—personally, professionally, and financially—for years to come.

Here's your complete guide to looking back at 2023, closing out the year strong, and navigating 2024 with clarity and confidence.

A year in review: Reflecting on your personal finances

Financial planning is a personal journey; no two paths are the same. So while it's important to look ahead at what we want to do, it's equally vital to look back in time and use previous experiences (positive and negative) to guide us forward. If we do it right, invaluable lessons will follow.

Review your financial goals

Start by looking at the goals you set for the year and assessing your progress. Then, even if you missed a few, you can learn from what caused it and evolve your strategy accordingly. The good news is that there is still time to make last-minute adjustments.  

Here are some questions to help you reflect on your goals:

• What were your financial objectives for 2023? Was it easy to write down the specifics of each one (e.g., how much you needed to save; by when)?
• Were you successful in making progress toward or achieving your goals?
• What do you believe led to achieving or not achieving each?
• Were they the right goals to start with, or did you change any during the year?
• Did you take time to celebrate your achievements, both big and small?

Explore your mindset around money

The decisions we make with money are rooted in a complex web of emotions, beliefs, and values. How we think and feel—the psychology of money—determines how we make decisions and the actions we take. 

Understanding your beliefs may be the key to making smarter, more informed decisions that align your money with what matters most.

Here are some questions to help you explore how to make better decisions in 2024.

• How do you feel about your overall financial plan for 2023?
• What steps did you take that you feel good about? 
• Are there any decisions you don't feel good about?
• What habits do you want to continue? 
• Are there any habits you want to break, change, or improve?
• What can you learn from each situation, and how can you apply those lessons to your plan moving forward?

Now let’s move on to the year-end deadlines.

The year-end financial checklist

The end of the year is a critical time to make important decisions in your overall plan to meet your objectives, prepare for key life milestones, and lower your taxes. 

Here are some planning moves to consider.

Tax planning

Check your tax withholdings to see if you are on track to cover your tax liability for the year. 

Major items like bonuses, stock options, and retirement savings can impact what you owe come tax time. And remember, you still have time to adjust your withholdings to get back on track and avoid IRS fees and penalties. 

If you experienced a major life event in 2023—bought a home, got married, or had a baby—understanding the impact on your deductions and tax credits is critical.

Retirement planning

Maximize contributions to your retirement accounts and know the deadlines and limitations for each. 

Evaluate 401(k) contributions before year-end

Check your contributions to your company retirement plan—like a 401(k)—to ensure you get the full employer match. 

• Remember that you have until year-end to hit your annual contribution limit—$22,500 for those under 50 and $30,000 for those over 50. You still have time to adjust your contributions to hit your desired level of savings.
• If you’re over 72, you’ll have to take your required minimum distributions (RMDs) if you haven’t yet. If you don’t, you could face an IRS penalty.
• Different deadlines may apply based on your age and the type of account (e.g., if you have an IRA or Roth IRA that you inherited). 

Make IRA contributions before the tax deadline

You can make Traditional IRA and Roth IRA contributions up until your tax filing deadline (typically April 15th of the following year). 

• The Roth IRA income phase-out range for singles and heads of household is $138,000 to $153,000.
• For married couples filing jointly the income ranges from $218,000 and $228,000.
• If your income falls above these limits, you may want to consider a backdoor Roth IRA, but first make sure you speak to a financial professional to understand the rules and tax implications.

For small business owners, be aware of deadlines for retirement plans

If you are looking to establish a retirement plan or make a change to an existing one, you need to know the deadlines for setting up the plan. 

Whether it’s a SEP IRA or SIMPLE IRA, a solo 401(k), or a defined benefit plan, deadlines range from October 1st of the current year to your tax filing deadline, with extensions.

Make the most of your employee benefits

Year-end is a great time to review your current workplace benefits and ensure you are making the most of them.

Use eligible FSA funds

If you funded a flexible spending account (FSA), you may have to spend your money before year-end. Some plans offer a grace period for reimbursements, so make sure to check with your plan administrator to know your deadlines so you can plan accordingly.

Roll over HSA contributions

If you are eligible to fund a health savings account (HSA), your savings can roll over into the new year. A lesser-known fact is that you can make HSA contributions for 2023 until the tax filing deadline, so you have time to top off your savings. The limits are $3,850 for individuals, $7,750 for families, and an extra $1,000 for those over 55.  

Plan for your stock compensation

Having a plan for your vesting shares and when you will exercise stock options is critical to making the most of your stock awards and minimizing taxes. Consider the overall value of the stock awards that will be reported as income and if they will trigger the alternative minimum tax (AMT).

Education savings and college planning

If you want to contribute to a 529 education savings plan, the deadline is typically 12/31, but check with your state as rules can vary. Keep in mind that these plans can be used for pre-K through college expenses and even student loans, though limits may apply based on how you use the money.

Review your charitable donations

If you give to charity every year, there are a few things to know.

• First, you can no longer deduct donations without itemizing. Unfortunately, this benefit was not extended from 2021, where you could deduct up to $300 ($600 for married couples) even if you didn't itemize. 
• Second, if you itemize your deductions, you should consider gifting any taxable investments with unrealized capital gains instead of cash. This allows you to avoid the capital gains tax and take a deduction for the amount you give.

Planning for your future: A look at the year ahead

It’s never too early to start planning for next year’s financial goals and life milestones. Financial planning is a process that should evolve to meet your needs as your life and the world around you change. 

Here are some questions to get you started. As you work through them, think about the impact they will have on your cash flow, taxes, and other parts of your plan.

Planning for specific personal financial goals

• What life milestones will you be experiencing next year? Do you have a plan to prepare for them? Do you need to make changes to your budget or your savings plan?
• Do you need to adjust your investment strategy? Are you comfortable with the level of risk in your portfolio? Do you have a plan for changes in inflation, interest rates, or taxes?
• Can you and should you increase your retirement plan contributions? Should you consider funding a new account type to diversify how your accounts are taxed?
• Do you feel prepared for an unexpected event or emergency? When was the last time you reviewed your insurance coverage or estate plan?

There are many changes to consider in the coming year, and these questions only scratch the surface. However, starting to plan for them today is essential to navigating the year ahead with less stress, greater clarity, and more enjoyment.

Closing out the year the right way

Year-end financial planning is about more than making one or two tactical tax or investment-related decisions. Yes, there are critical planning moves you need to make before January rolls around, but year-end planning, done right, can be so much more.

A financial plan that evolves with your ever-changing life can help you make smarter, more informed decisions in the future. From taxes, investments, and major purchases to life milestones big and small, financial planning is essential to navigating life with clarity and confidence.

Learn how a CFP® Professional at Facet can help you with critical year-end decisions and develop a personalized financial plan that sets you up for success in the year ahead.