When is it too late to apply?

I've left it late, and 22 Jan is the deadline for the master's program I wanted to apply to. I don't think I can get 3 letters from faculty in that time.

I'm wondering if there would be any advantages of applying next year. My grade average will be much higher after this year...

Take some grad classes as a non degree seeking student if you wait until next year to apply.  A's in a graduate course will look good on your application, and you can apply those credits once you're officially in the program