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As the end of 2025 approaches, now is the time to evaluate your financial picture, reduce your tax burden and position yourself for a stronger year ahead. Many of the most effective financial strategies are time-sensitive, meaning they must be completed before Dec. 31.
This guide brings together key tax-planning opportunities, estate-planning considerations and charitable-giving strategies to help you make the most of the remaining months of the year.
1. Tax planning strategies for 2025
Year-end tax planning isn’t only about reducing what you owe this year. It’s about building a long-term tax-efficient strategy. Here are the top priorities to review.
Maximize contributions to retirement accounts
Before year-end, assess how much you’ve contributed to your:
- 401(k) or 403(b);
- IRAs;
- Self-employed retirement plans (SEP IRA, Solo 401(k)).
Increasing your pretax contributions can reduce your taxable income while boosting retirement savings.
Evaluate your investment portfolio for tax efficiency
Before Dec. 31:
- Review opportunities for tax-loss harvesting;
- Identify positions with large gains or losses;
- Check whether your asset mix still aligns with your risk tolerance.
Tax-loss harvesting can offset gains and up to $3,000 of ordinary income annually.
Accelerate or defer income and deductions strategically
Depending on your situation, accelerating certain expenses into 2025 or deferring income to 2026 may result in substantial tax savings.
For example:
- If you expect a higher income next year, taking deductions this year may be advantageous.
- If you anticipate a lower tax bracket later, deferring income may help.
Consider Roth conversions
Year-end is a prime time to evaluate converting traditional IRA dollars to Roth. A Roth conversion:
- Locks in today’s tax rate;
- Provides future tax-free withdrawals;
- Helps reduce required minimum distributions (RMDs) later in life.
Work with your financial planner and accountant to determine the optimal amount to convert.
2. Estate planning essentials
A well-designed estate plan ensures your wishes are honored and your loved ones are protected. Year-end is an excellent time to update the documents you may not look at often.
Review key legal documents
Make sure the following are current:
- Will;
- Health care proxy;
- Power of attorney;
- Living will;
- Trust documents.
Life moves quickly. Life events such as marriages, births, deaths and asset changes can all make your existing documents outdated.
Evaluate your beneficiary designations
Beneficiary designations override what’s written in your will. Confirm that the primary and contingent beneficiaries on your retirement accounts, insuranace policies, pensions and annuities match your wishes.
Annual gifting for estate strategy
In 2025, you may gift up to $18,000 per person tax-free. Annual gifting:
- Reduces the size of your taxable estate;
- Helps transfer wealth efficiently;
- Supports loved ones or charities during your lifetime.
3. Charitable giving opportunities
Charitable giving can align with your values while also offering tax advantages, especially when done strategically before year-end.
Take advantage of qualified charitable distributions (QCDs)
- Those age 70 1/2 and older may give directly from their IRAs up to $105,000 in 2025;
- The distribution is excluded from income;
- QCDs can help reduce Medicare surcharges;
- No itemization is required.
Consider donating appreciated securities
Instead of giving cash, you may give appreciated investments held for more than one year.
Benefits include:
- No capital gains tax;
- Deduction for full fair market value;
- Greater impact at the same cost.
Use a donor-advised fund (DAF)
A DAF allows you to:
- Take an immediate tax deduction;
- Invest donations for potential growth;
- Give to charities over time at your own pace.
This is particularly useful in high-income years.
A strong financial finish to 2025 starts with planning today
Year-end planning is one of the most important steps you can take to strengthen your financial foundation. Whether you’re optimizing your tax strategy, revisiting your estate plan or maximizing you charitable effect, thoughtful action before Dec. 31 can create meaningful advantages for years to come.
If you’d like guidance tailoring these strategies to your situation, the SKG Team is here to help you make the most of 2025 and set the stage for a successful 2026.
Ben Soccodato and Chris Kampitsis lead The SKG Team at Barnum Financial Group in Elmsford.