As the end of 2020 approaches, now is an excellent time to ensure your finances are in order. Taking a few minutes to check off all the items on your fiscal to-do list can help you avoid headaches and even penalties next year.

For example, if you have a 401(k) plan, Dec. 31 is a key deadline on a couple of different fronts that you should be aware of. Failing to act before 2021 could cost you.

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1. The deadline for 2020 401(k) contributions

Your 401(k) contributions are tax-deductible, meaning any money you stash in this account in 2020 will reduce your tax bill in April. But in order to receive the deduction for this year, your contributions must be made in this year. Any contributions made after Dec. 31 date will count toward your deductions from 2021's taxes.

That's worth mentioning because many people have both a 401(k) and an IRA, and the deadlines for IRAs are different. Money contributed to a Traditional IRA is also tax deductible, but you have until April 15 of the following year (in this case, 2021) to make your final contributions and receive the deduction.

If you have spare cash you're planning on putting toward your retirement fund, think about whether now is the right time to invest it. Directing as much cash as possible into your 401(k) by the end of the year can be a smart move, especially if your employer offers matching contributions that you haven't yet maxed out. Not only will that boost your retirement savings, it will lower your tax bill next year, too.

On the other hand, if money is tight right now, you might want to put your spare cash toward an emergency fund instead. The last thing you'd want is to save every extra dollar you have in your 401(k), and then find that you need to withdraw that money or take out a loan from the account later -- both moves which come with penalties and tax implications.

2. The CARES Act expires

More aspects of the CARES Act are set to expire at the end of the year -- among them, a few key 401(k) benefits.

One is the ability to take penalty-free withdrawals of up to $100,000 from the accounts. Normally, if a person takes money out of a 401(k)  before they reach 59 1/2, they must pay a 10% penalty as well as income taxes on the withdrawal. The CARES Act waived the penalty for this year and gave people three years to pay the related income taxes.

In addition, savers are normally able to avoid paying income taxes on  401(k) withdrawal if they redeposit the funds within 60 days. The CARES Act extended this grace period, giving people three years to repay a distribution and avoid income taxes.

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The CARES Act also relaxed some of the rules around 401(k) loans. While you're normally only allowed to borrow up to $50,000 or half your 401(k) balance, the CARES Act increased these limits to $100,000 or your full vested amount. You also have one extra year to pay back your loan under the CARES Act.

To take advantage of these benefits, you'll need to borrow or withdraw from your 401(k) before Dec. 31. This doesn't necessarily mean you should tap your retirement savings, however. In general, it's best to avoid taking money from your retirement fund unless it's a true emergency and you have no other savings. But if you're going to dip into your 401(k), it would be better to do it before 2020 ends.