Tax Planning Pages

Year-End Tax Tips: Credits, Breaks

The Tax Year ends on December 31.

There are still some opportunities to save on your taxes even after December 31 of the previous or current year. Before you prepare and e-file your current year federal and state tax returns on, you may want to ask yourself this question:

"How can I save money on my taxes?"

Here are three simple ways you can save money and reduce your taxes:

  1. Spend less money on everyday purchases throughout the year. Use our simple day-to-day money saving tips for frugal living and maximize your monthly budgets!
  2. Update your paycheck withholding on your federal Form W-4 and receive your tax refund money now or owe less taxes when you file your next tax return. Use the free Tax Withholding Assessment Tool to find out how much tax to withhold and reach your tax goals!
  3. Claim tax breaks you qualify for on your tax return by December 31, such as tax credits and tax deductions.

Tax To-Do's by December 31

You can eFile your upcoming tax return beginning in January of next year. It is important to consider which tax credits and tax deductions you can claim on your upcoming tax return before the year ends. For example, if you have a child born on January 1 or after, you cannot claim the Child Tax Credit on this year's tax return; you would have to wait until the beginning of the following year to claim the credit on that return.

Here are 16 tax tips to get you prepared for Tax Day:

Towards the end of the year, it may be a good idea to wrap up any contributions to traditional IRAs, 401(k)s, or any other account you plan to deduct on your return. Consider making contributions to your IRA, contribute to your HSA or MSA, and finish your annual contributions to your 529 education plan. Review the contribution limits on the linked pages to plan your finances. Alternatively, make sure you have taken your required minimum distribution or RMD if you are obligated to do so by the end of the year. You can finish these up by the end of the year, but you can still make these contributions until April 15.
If your last tax refund or the amount of taxes you owed was not what you had expected, consider adjusting your withholding from your wages or paycheck. If your tax refund was large, you may have withheld too much during the year; if you owed taxes, you did not withhold enough. Complete and submit a new W-4 to your employer now for the current tax year and starting in early January for the next tax year, and get your tax return balanced. Contact us if you have questions about this important topic.
A Flexible Spending Account or FSA can be used to pay for certain medical expenses or dependent care. If you do not use all the money in your FSA by the end of the year, you are only able to roll over or carry forward up to $550 into next year.
Tax-Loss Harvesting is when a taxpayer sells assets at a loss in order to offset asset sales that resulted in capital gains. A taxpayer can write off a maximum of $3,000 of capital gain losses for a given tax year in short-term losses against short-term gains (usually taxed at a higher income tax rate than long-term capital gains). $3,000 in long term capital losses can also be used to offset long-term capital gains. Consider the pros and cons of long-term and short-term investments, capital gains or losses, and the taxes of each category—see details on the linked page. Sell any stocks that may be beneficial to sell by the end of the year and keep those which would yield more benefit in the long run. You may be able to sell investments at a loss in order to offset your taxable gains. See details on cryptocurrencies and NFTs.
A Roth Individual Retirement Account or IRS conversion is when a taxpayer takes some or all of the savings from a traditional IRA and converts it into a Roth IRA, in order to pay taxes now and not later when funds are withdrawn from the Roth IRA.
Let's say a taxpayer has $10,000 or less in a traditional IRA but would like to move or convert all or some of these funds into a Roth IRA. Keep in mind, you will have to pay the IRS income tax on any amount converted, but you do not pay taxes when you withdraw the money from a Roth IRA later.
The new Roth IRA account will be subject to all the rules that apply to Roth IRAs, such as the five-year minimum holding period before you can make withdrawals. On the other hand, it also means you can avoid required minimum distributions or RMD.
The annual gift tax exclusion applies to gifts to each donee. If you give a substantial cash gift to your child or dependent, it is generally not taxed unless over a certain amount. Learn more about the gift tax exclusion and its limits via the linked page.
At age 72, you are required to make minimum retirement distributions. Though you can withdraw more than the minimum amount, you may have to pay more income tax on your retirement income. Estimate your next tax return so you can get an idea of what you may owe based on how much money you take from your retirement this year. In general, distributions from retirement plans (not including Roth accounts) are included in your taxable income. Qualified Roth distributions are tax-free because the contributions to these plans are already taxed, unlike regular retirement plan contributions.
If you itemize deductions instead of taking the standard deduction, keep track of and make any payments that may be tax deductible by the end of the year, such as the contributions above your deductible mortgage interest payments. Not sure which deduction method to use? will recommend the best option.
If you are self-employed, purchase any assets you plan to deduct on your taxes by the end of the year. Finish these transactions and keep receipts so you can report the money spent on your taxes. will help you report these and also claim the Qualified Business Income Deduction (QBI).
Create your own or follow the linked checklist to be sure you are ready to prepare your taxes. File your own taxes by following the step-by-step process on the eFile Tax App.
Your statement, deduction, and income tax forms are generally issued by January 31 of the following year. Gather these forms and keep them handy for when you are ready to prepare your taxes. These include a W-2 for wages or salary, a 1099 from for self-employment or retirement income, receipts for donations to charity, and other statement forms.
To get an idea of what your return may look like, we recommend using the linked calculator to see how your taxes may be calculated when you file. You can use estimated figures or actual numbers from your tax forms when using the calculator to see various results. We also have individual tax calculators for special tax situations.
The deadline to file and pay taxes is generally on or around April 15. If you owe taxes, file a return or a tax extension by this date to reduce or eliminate any tax penalties and pay as little or as much due tax as you can. If you miss the April deadline, you can only e-file this return until October 15 - after that date, you will have to manually prepare tax forms.
Use tax software to prepare your own taxes and save money by not paying a certified public accountant or CPA. Tax software will help you claim tax credits you may qualify for. offers simple, affordable, step-by-step tax preparation and e-filing for federal and state tax returns. e-Filing and selecting direct deposit is the simplest and quickest way to file taxes and get your tax refund. Begin preparing your return in January, but don't file until you have added all your forms. Compare to other popular tax preparation platforms. offers completely free online support via your Personal Support Page. When you create a free account and start to prepare your taxes, we are able to offer more personalized support based on your account information. Contact us here.

Here's something else to consider: the values for each tax credit or tax deduction often vary by tax year. Once the value of a credit or deduction for a tax year expires, you can only claim that value on a return for that year; you cannot expires credits or other tax items on the current tax year return.

This is why we strongly recommend tax return planning throughout the year in order to take advantage of as many tax credits and deductions as you qualify for by the end of the year.

Avoid Surprises by using the Tax Calculator and Tax Refund Estimator!

Free Tax Calculators and Tools

Current Year Tax Credits and Deductions

Review all the tax credits and tax deductions you may qualify to claim on your next tax return. Tax credits reduce your tax dollar-for-dollar and may even be refunded to you as a tax refund. Popular tax credits include the Child Tax Credit, the Premium Tax Credit, and the Earned Income Tax Credit. There are varying thresholds which may affect the amount of the credit as well as whether or not you qualify to claim it. The eFile Tax App will determine if you qualify for these credits when you prepare your taxes, calculate the amount, and report it on the proper tax forms when you file.

Tax deductions work differently by deducting certain expenses or taxes from your taxable income. One of the more common tax deductions is contributions to traditional individual retirement accounts. This deduction reduces your taxable income by some or all of your contributions. Using to prepare your taxes will allow the software to calculate deductions like this on your return for you.

Tax credits, deductions, breaks, or write-offs change each year as the tax code is updated. There are many tax breaks that are officially expired. This means that under current law, none of these credits and deductions are available to claim on current year tax returns. Our expired tax laws page provides details on these tax breaks.

We will update our site with the latest information on tax breaks as soon as any official announcements are made. Stay up to date on the latest tax law changes and news.

Tax Help for January

When can you file Taxes? How to maximize my tax refund?

See the items in the table below to get a better understanding of the filing season to get the most out of your return.

Tips, Help
Early January
If you have not done so already, get an early start by estimating your taxes using this free calculator. Gather your forms and use actual figures or use simple estimates. By early January, you will be able to sign into your eFile account and prepare your taxes to see what your return may look like in real time.
Early January
The tax season starts in January and will officially open. You can use the eFile platform to begin preparing your tax return once the season is underway. When the IRS begins processing tax returns, you will be able to e-file your federal and state returns.
End of January
By this point, you should have received your tax forms and other statements, as employers and other issuers are required to send these by the end of January. Depending on your situation, this may include other forms or letters, such as:
Early February
Begin preparing your taxes on your eFile account if you have not already. Use all the forms you have received and other documents from your records to be sure the information you enter is accurate and let the eFile Tax App handle the calculations. If possible, be sure you have a trusted bank account established that you know will not be closing or changing for your tax refund. This will allow the IRS to directly deposit this instead of sending a check in the mail.
January - April
Generally, the IRS allows you to make contributions to certain accounts (retirement, HSA) through the Tax Day deadline. For example, if you wanted to contribute the maximum amount to your HSA and contributed under the limit during the year, you typically have until April 15 to contribute additional funds to this account and apply it to last year's taxes.
After Filing
Once you have sent your returns to the IRS and state and they have been accepted, track your tax refund or verify that your payment has been processed by checking your bank account or IRS account.

More Tax Planning and Help