Essential Year-End Mental Checklist: Financial Tasks, Tax Scams, and Charity Cautions

As the year winds down, many people focus on holiday plans and New Year’s resolutions. Yet, the final weeks of the year are crucial for managing your finances and protecting yourself from scams. Overlooking key tasks now can lead to missed opportunities, unexpected costs, or even fraud. This post highlights three important areas to keep on your mental radar before the calendar flips: reviewing your year-end financial to-dos, staying alert to IRS and state tax imposter scams, and watching out for charity fraud. Taking action in these areas can help you close the year strong and start the next one with confidence.

Review Your Year-End Financial To-Dos

The end of the year is a natural checkpoint to assess your financial health and prepare for tax season. Many important tasks require attention now to avoid last-minute stress or missed benefits.

1. Check Your Spending and Budget

Look back over your spending for the year. Did you stick to your budget? Are there areas where you can cut back or save more? Reviewing your expenses helps you plan better for the coming year and identify any unusual charges or errors.

2. Maximize Retirement Contributions

If you have a 401(k), IRA, or other retirement accounts, check your contribution limits. Many plans allow you to make contributions up to December 31, which can reduce your taxable income. For example, in 2023, the 401(k) contribution limit is $22,500, with an additional $7,500 catch-up contribution if you are 50 or older. Making the most of these limits can boost your retirement savings and lower your tax bill.

3. Plan for Required Minimum Distributions (RMDs)

If you are 73 or older, you must take RMDs from your traditional IRAs and 401(k)s by December 31. Missing this deadline can result in a hefty penalty equal to 50% of the amount not withdrawn. Check your account statements and plan your withdrawals accordingly.

Be Wary of IRS or State Tax Imposter Scams

Tax season scams often start before the filing deadline. Scammers impersonate IRS or state tax officials to steal money or personal information. These scams increase toward the end of the year as criminals try to catch people off guard.

Common Scam Tactics

• Threatening phone calls: Scammers claim you owe back taxes and threaten arrest or legal action if you don’t pay immediately.

• Fake emails or texts: Messages ask you to click links or download attachments that install malware or steal data.

• Phony refund offers: Scammers promise large tax refunds if you provide personal information or pay fees upfront.

  
  

How to Protect Yourself

• The IRS will never initiate contact by phone, email, or text to demand immediate payment or ask for sensitive information.

• Always verify calls by contacting the IRS or your state tax agency directly using official phone numbers.

• Do not click on links or open attachments from unknown or suspicious sources.

• Use strong, unique passwords for your online tax accounts and enable two-factor authentication.

• Report any scam attempts to the IRS at IRS.gov or your state tax agency.

  
  

Watch for Charity Fraud

The holiday season inspires many to give to charity. Unfortunately, scammers exploit this generosity by creating fake charities or misusing donations.

How Charity Fraud Works

• Fraudsters set up websites or social media pages that look like legitimate charities.

• They pressure donors for immediate contributions, often asking for payment by wire transfer, gift cards, or cash.

• Some scams claim to support disaster relief, veterans, or children but keep the money for themselves.

  
  

Tips to Avoid Charity Scams

• Research charities before donating. Use websites like Charity Navigator, GuideStar, or the Better Business Bureau’s Wise Giving Alliance.

• Verify the charity’s tax-exempt status through the IRS Tax Exempt Organization Search tool.

• Avoid donating via cash, wire transfer, or gift cards. Use credit cards or checks for better fraud protection.

• Be cautious of high-pressure tactics or emotional appeals that rush you to give.

• Keep records of your donations for tax purposes and to confirm the charity’s legitimacy.

As you wrap up your year-end tasks and stay alert to seasonal scams, remember that you don’t have to navigate any of it alone. If you receive an unexpected IRS or state tax notice—or anything that just doesn’t feel quite right—reach out to your accountant before taking action. A quick review from a trusted professional can save you stress, money, and a whole lot of holiday headaches.