Year-End Planning Reminders

As we approach the end of the year and get busy with holiday preparations, shopping lists, and travel plans, it’s time to wrap up last-minute financial tasks. Here’s a quick checklist to complete before you put the turkey in the oven!

Tax-Smart Giving

Charitable Contributions: The One Big Beautiful Bill Act (OBBBA) introduces new limitations on charitable deductions. Starting in 2026, you’ll only be able to deduct charitable contributions that exceed .5% of your adjusted gross income (AGI). Additionally, the tax benefit of those deductions will be capped at 35%, even if you pay some taxes at the highest rate. If you typically give smaller amounts annually to charities or a Donor Advised Fund, consider giving several years ahead of schedule to maximize your deduction before the new rules take effect.

Qualified Charitable Distributions (QCDs): If you are age 70 ½ or older, you can donate up to $108,000 directly from your IRA to qualified charitable organizations. These donations count toward your Required Minimum Distributions (RMDs), helping to keep that income off your tax return.

Gifts to Individuals: You can gift up to $19,000 per recipient in 2025 without using any of your lifetime estate exemption or filing a gift tax return. Complete these gifts as soon as possible.

Retirement Account Actions

HSAs: Maximize your 2025 HSA contributions before year-end. Limits are $4,300 (individual) or $8,550 (family), plus $1,000 if you’re 55+.

Employer Plans: As an employee, you can contribute up to $23,500 to your 401(k), 403(b), or similar plans if you are under 50: $34,750 if you are 60 – 63: or $31,000 if you are 50-59 or 64+.

RMDs: If you were born in 1952, take your first RMD by December 31st to avoid doubling up in 2026. If you inherited an IRA from a parent or other relative, you may also be subject to distribution requirements. Please let us know, and we will help you determine which set of rules applies and how much you are required to distribute.

IRA Contributions: You have until April 15, 2026, to make IRA or Roth IRA contributions for the 2025 tax year. The maximum contribution is $7,000 if you’re under 50, or $8,000 if you’re 50 or older. Income limits may affect deductibility or Roth eligibility, so let us know if you have questions.

Year-end Tax Moves

Roth Conversions: The OBBBA made the lower tax rates from the 2018 Tax Cuts and Jobs Act permanent. If you expect to be in a higher tax bracket in the future, now may be a good time to convert pre-tax retirement funds to Roth IRAs.

Tax-Loss Harvesting: Consider tax-loss harvesting before year-end. You can realize up to $3,000 in net capital losses to offset ordinary income or use long-term losses to offset long-term gains.

Gain Harvesting: If your taxable income is under $48,350 (single) or $96,700 (married filing jointly), you may be able to sell appreciated assets to lock in gains at 0% and increase your cost basis for the future.

Workplace Benefits

Flexible Spending Accounts (FSA): Verify your FSA balance and make plans to use remaining funds before March 15, 2026, if your employer offers a grace period.

As always, we are here to help, so let us know which of these we can help you mark off your list soon!

Whitney Butler