End-of-Year Financial Checklist for Freelancers and Solo Entrepreneurs

Max Out Your Solo 401(k)

Contributions to a Solo 401(k) not only lower your taxable income but also allow for higher flexibility if you’re self-employed. Remember, the deadline to contribute is December 31. Setting up a Solo 401(k) could be a game-changer if you haven’t already.

Consider a Roth IRA Conversion

Thinking about converting your Traditional IRA to a Roth IRA? Completing it by December 31 ensures you only pay taxes on this year’s earnings. For those planning a backdoor Roth IRA move, note that the 2024 limit is $61K, increasing to $64K in 2025.

Harvest Your Investment Losses

Had investments that underperformed? Selling them before year-end can offset capital gains and help reduce your tax liability—a smart way to turn losses into savings.

Prepay Business Expenses

As a freelancer or entrepreneur, prepaying for next year’s expenses—like software subscriptions or professional services—can lower your taxable income for this year. If your income exceeds $100K, consider discussing S-Corp status with your CPA to optimize your tax savings.

Leverage the Gift Tax Exclusion

You can gift up to $16K per person this year without incurring taxes. If you’re saving for a child’s education, contributing to a 529 plan before December 31 might also qualify you for a state tax deduction.

Take charge of your year-end finances and set yourself up for success in the new year!

Want more tax-saving tips?

Check out poetmoney.com/blog — we’re built specifically for small business owners and freelancers.