The end of year is nearing, and these final weeks of the year present a critical window for implementing strategies that can significantly reduce your tax liability and advance your long-term financial goals.
With this timeline in mind, here are some things to consider before year-end to help ensure your financial plans remain on track.
1. Optimize Tax-Advantaged Accounts
Tax-advantaged accounts are a primary tool for reducing current taxable income and building long-term, tax-efficient wealth. By leveraging these tools, you can achieve immediate tax savings while systematically growing your nest egg.
- Maximize your Workplace Retirement Accounts (401(k), 403(b), 457 Plans)
- Review your payroll deductions to ensure you are on track to meet your contribution goals by year-end
- Review IRA Eligibility and Funding Strategy
- You can contribute until April 15, but year-end is a good time to determine which IRAs you are eligible for based on income and other limitations.
- If you make too much money to contribute directly to a Roth IRA, consider executing a “back door Roth,” making after-tax contributions to a traditional IRA and converting it to your Roth IRA.
- Fully fund your Health Savings Accounts (HSA), if eligible
- For those with a high-deductible plan, the Health Savings Account offers a unique triple-tax advantage. Contributions are tax-deductible, the funds grow tax-free, and withdrawals are tax-free when used for qualified medical expenses.
| Account Type | 2024 Limit | 2025 Limit | Catch-Up Contribution |
| 401(k), 403(b), 457 | $23,000 | $23,500 | **$7,500** (Age 50+)(New for 2025: $11,250 for ages 60–63) |
| Traditional & Roth IRA | $7,000 | $7,000 | **$1,000** (Age 50+) |
| HSA (Self-Only) | $4,150 | $4,300 | **$1,000** (Age 55+) |
| HSA (Family) | $8,300 | $8,550 | **$1,000** (Age 55+) |
| SIMPLE IRA | $16,000 | $16,500 | **$3,500** (Age 50+)(New for 2025: $5,250 for ages 60–63) |
2. Investment Portfolio Adjustments
Year-end is an ideal time to review your investment portfolio for tax efficiency. Proactive strategies like tax-loss harvesting and Roth conversions can help you manage capital gains and position your portfolio for the future.
- Consider Tax-Loss Harvesting
- This strategy involves selling investments at a loss to offset realized capital gains from other parts of your portfolio. Unused Losses can offset up to $3,000 of ordinary income.
- Be mindful of the “wash sale rule,” which prohibits you from selling an investment for a loss and buying the same or a “substantially identical” one within 30 days before or after the sale.
- Evaluate a Roth Conversion
- If you are in a lower tax bracket this year, converting IRA funds to a Roth IRA can lock in lower taxes and create tax-free growth.
- Review and Monitor Capital Gains
- If you hold long-term, appreciated capital assets, and are in the lower income tax brackets, consider selling enough to generate long-term gains sheltered at the 0% rate.
- Monitor capital gain distributions estimates to managed year-end mutual fund taxes and avoid an unexcepted tax bill.
3. Charitable Giving Strategies
It’s also a great time to review your giving plans and take advantage of tax benefits. Smart giving can lower your taxes while helping causes you care about. Because deduction rules will change in 2026, gifts made in 2025 may save you more. Whether you donate cash, appreciated assets, or use tools like donor-advised funds, planning now can increase both your impact and your tax savings.
- Bunching Charitable Contributions
- Starting in 2026, a new rule will cap the value of itemized deductions. This means a charitable gift made in 2025 will be worth more than a gift made in 2026 and subsequent years.
- Consider bunching multiple years of gifts in 2025 before deduction caps start in 2026.
- Consider Donor Advised Funds
- Using a donor-advised fund allows you to take the full, uncapped tax deduction in 2025 while spreading the actual grants to charities over several years.
- This strategy may be useful to accelerate deductions in a higher income year.
- Donating Appreciated Assets
- Itemizers can donate assets (like stock) held for over one year, allowing them to deduct the full fair market value while potentially avoiding the capital gains tax that would be due upon selling.
- Qualified Charitable Distributions (QCDs)
- If you are age 70½ or older, you can donate up to $108,000 directly from a traditional IRA to a qualified charity. This allows you to satisfy your RMD obligation without the distribution being added to your taxable income. This is an especially effective strategy, but the charity must receive the funds by December 31.
4. Year-End Deadlines
Proactive management before December 31 is essential to avoid penalties and maximize the benefits related to required distributions and annual gifts.
- Complete Required Minimum Distributions
- If you are over age 73 or have an inherited IRA or inherited Roth IRA, be sure to distribute the Required Minimum Distribution (RMD) prior to December 31st to avoid penalties.
- Strategies like a QCD or reinvesting the funds in a taxable brokerage account should be considered.
- Evaluate Annual Gifting to Loved Ones
- You can give up to $19,000 per recipient to any number of individuals. Married couples can combine their exclusions to give up to $38,000 per recipient. These gifts are not tax-deductible for you, but they are received tax-free by the recipient and are an effective tool for reducing the value of a taxable estate.
- Review Educational Planning Opportunities
- Consider contributing to a 529 Plan account before year-end. Most states offer a state deduction (or sometimes a credit) up to a certain amount of your contribution.
- Be sure to reimburse yourself from 529 Plans for qualified education expenses you paid but did not yet distribute as distributions must be made in the year of the expense.
5. Business Planning
If you own a business or are self-employed, year-end is an important time to review your finances. Smart planning now can lower your taxes and strengthen your business for the year ahead.
- Business / Self Employed Retirement Plan Considerations
- If you have a small business, you could establish a SEP, SIMPLE, or Solo 401k Plan and make a retirement plan contribution to reduce net taxable income. There is very little administrative burden to these plans, but each comes with specific contribution deadlines, rules, and limits.
- Accelerate or Defer Income / Expenses
- Like individuals, be mindful of deferring income or accelerating expenses/income. This may be especially important when it comes to the qualified income business (QBI) deduction some business owners may be eligible for.
Financial planning is most effective when it’s ongoing. Year-end isn’t a scramble — it’s a checkpoint. A chance to confirm you’re on track, make intentional decisions, and set the stage for a calmer, more confident year ahead.
If you’d like help reviewing any part of this checklist, or you simply want the peace of mind of knowing it’s all handled,
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