Year-End Tax Planning and Filing Deadlines

Current year tax strategy requires timely action on estimated payments, year-end deductions, and filing decisions where every quarter and month offers distinct planning opportunities.

Estimated payments have their own deadlines. If you have income not subject to withholding -- self-employment, rental, investment gains -- the IRS expects quarterly estimated payments (April 15, June 15, September 15, January 15). Underpaying triggers a penalty calculated on the shortfall for each quarter, not just at year-end. The safe harbor: pay at least 100% of last year's tax (110% if your AGI exceeded $150,000).

Year-end planning happens before December 31. Many tax-saving moves must be completed by year-end: charitable contributions, tax-loss harvesting, Roth conversions, business equipment purchases under Section 179 or bonus depreciation. Once the calendar flips, these opportunities close. The exception is traditional IRA and HSA contributions, which can be made up until the April filing deadline.

Choosing between filing on time and filing on extension is a legitimate decision. Extensions are not a red flag to the IRS. If your situation is complex and you need more time to gather K-1s, finalize deductions, or coordinate with a CPA, extending is often the responsible choice. The key is paying your estimated tax liability by the original deadline.

The tradeoff: Engaging a CPA mid-year costs more in hourly fees but saves more in missed deductions. Waiting until March to find a CPA for a complex return usually means rushed work or extension.