As the calendar flips to November, it brings more than just cooler weather and holiday excitement—it signals the best time to start preparing for year-end tax planning. While many wait until December or even the start of the new year to think about taxes, November provides a window of opportunity for proactive, strategic moves. At Atlantic Tax Services, we emphasize taking advantage of this month to set yourself up for a smoother and potentially more beneficial tax season.
Why November is the Ideal Time
November offers a balance of time and foresight that December doesn’t always provide. The month allows taxpayers to:
- Evaluate Financial Options: With two months left in the year, November gives you the breathing room to explore and implement strategies without rushing.
- Avoid the Year-End Rush: December can become hectic as financial institutions, tax advisors, and businesses manage a high volume of requests and activities. Starting in November helps you avoid this year-end crush.
- Adapt Strategies: If you discover that adjustments are needed, November still provides time to make changes that will be effective before December 31st.
What Can You Do in November?
Here are some essential steps to take during November for effective year-end tax planning:
1. Maximize Contributions to Retirement Accounts
One of the most effective ways to reduce your taxable income is by contributing to retirement accounts such as a 401(k) or IRA. Check your contribution levels in November and, if possible, increase them before the year’s end to take advantage of the tax deductions.
2. Assess Your Withholding and Estimated Taxes
November is a perfect time to review your tax withholding or estimated tax payments. If you discover that you may owe taxes or have paid too much, you still have time to adjust your withholding or make additional estimated tax payments before year-end.
3. Plan Charitable Contributions
Thanksgiving often inspires gratitude and giving, making November a popular month for charitable donations. Contributions to qualified charities are tax-deductible, so consider making those donations this month to enjoy the dual benefit of supporting a cause and reducing your taxable income.
4. Review Investments for Tax-Loss Harvesting
November is an excellent time to look at your investment portfolio and plan any tax-loss harvesting. Selling investments that have lost value can offset any capital gains you’ve made throughout the year, potentially reducing your taxable income. This is especially beneficial if you’ve seen growth in other parts of your portfolio.
5. Use Up Flexible Spending Accounts (FSAs)
If you have a Flexible Spending Account, November is the time to review how much you have left and plan to use it before the “use it or lose it” deadline at year-end. Eligible expenses may include medical treatments, vision care, and over-the-counter medications.
6. Evaluate Business Expenses
For small business owners, November is an ideal month to review expenses and consider purchases or investments that could be deductible. Whether it’s new equipment, software, or business services, making these expenses before December 31st can help reduce your taxable income.
The Advantages of Starting in November
By starting in November, you give yourself time to:
- Strategize Thoughtfully: Rushed decisions in December may lead to missed opportunities or errors. November lets you plan thoughtfully and strategically.
- Work with Professionals: Tax professionals and financial advisors tend to be more available in November than during the end-of-year rush. Consulting with them now can help you make better decisions tailored to your situation.
- Spread Out Expenses: If adjustments need to be made, November provides enough time to spread out expenses and contributions over your November and December budget.
How Atlantic Tax Services Can Help
At Atlantic Tax Services, we understand that year-end tax planning can feel complex and overwhelming. Our team is here to provide personalized guidance tailored to your unique financial situation. Whether it’s reviewing your current tax standing, suggesting strategic moves, or answering your questions, we’re ready to assist you in making the most out of November.
Take Action Now
November is your month to get ahead on year-end tax planning and set yourself up for a smooth tax season. By taking proactive steps now, you can minimize stress, maximize your deductions and credits, and ensure that you’re prepared when tax season arrives. Don’t let this valuable month pass by without putting your tax strategy into action. Contact Atlantic Tax Services today to schedule a consultation and start making the most of November.
