End-of-year tax planning isn’t just about potentially reducing this year’s bill—it’s about building habits that can benefit you for years to come. Take the time now to review your current situation, consult with your Financial Advisor or tax professional, and make decisions that put you in better control of your financial future.

Here are several steps to consider before the beginning of 2026.

1. Explore Roth Conversions

If you have considered converting your Traditional IRA or 401(k) funds to a Roth IRA, 2025 may be a fitting year to do so. Although Roth conversions generate immediate taxation, federal tax rates remain low. If you are reluctant to absorb a large tax bill, consider a series of smaller, partial conversions over time, utilizing lower tax brackets. Keep in mind that Roth conversions are permanent, so be certain there are sufficient funds to pay the taxes before completing the conversion. All conversions must be completed by December 31 to qualify as 2025 taxable income.

2. Take Your RMDs

IRA owners aged 73 or older must take RMDs. Participants in employer plans who are age 73 or older are also subject to RMDs if they do not qualify for the “still-working exception.” Beneficiaries may also be subject to RMDs.

December 31, 2025 is the deadline for most RMDs. However, there is an exception to this deadline for a person’s first RMD. If 2025 is the first year an RMD is required for a retirement account owner, the deadline for that RMD is extended to April 1, 2026.

Under the SECURE Act and SECURE Act 2.0, where the decedent’s account is payable to a Designated Beneficiary who is not an “Eligible Designated Beneficiary” listed in Section 401(a)(9)(E)(ii), and the plan participant or IRA owner died on or after reaching their Required Beginning Date, a “10-year” rule applies. Under that rule, all the account’s property must be distributed in full no later than the end of the calendar year containing the 10th anniversary of the plan participant’s or IRA owner’s death. In addition, annual required minimum distributions must occur in each of the nine years following the year of death since, under IRC Section 401(a)(9)(B)(i), distributions payable to a designated beneficiary must be paid at least as rapidly as before death (“ALAR rule”). The ALAR rule was not altered by the SECURE Act nor by SECURE 2.0.

3. Consider Charitable Giving

Consider donating appreciated securities to charities and avoiding a potential taxable capital gain when you sell. Avoiding the capital gains tax is one advantage, a tax deduction for those itemizing their deductions is another potential benefit, and, of course, the benefits reaped by the charity itself. With the standard deduction for 2025 increased to $31,500 for married couples filing jointly and $15,750 for single filers, many taxpayers may no longer benefit from itemizing every year. One strategy is to “bunch” deductions—such as charitable donations or medical expenses—into a single year to exceed the standard deduction threshold. Setting up a donor-advised fund allows you to make a sizeable philanthropic contribution now, claim the deduction this year, and distribute the funds to charities over time.

4. Consider Qualified Charitable Distributions

Qualified Charitable Distributions, or QCDs, are distributions from your IRA account directly to a qualifying charity. IRA owners 70½ years of age and older are eligible. While the SECURE Act raised the RMD age from 70½ to 73, QCDs remain available at age 70½. The benefit of giving to charities from your IRA is that you do not pay income tax as you would on funds distributed from your IRA. The charity gets the full donation, and the donor does not have to claim the distribution as income. You may want to consider making direct transfers of up to $105,000 ($210,000 for married couples filing jointly) from your IRA to eligible charities.

5. Stay Informed About Tax Legislation Changes

In July 2025, many key provisions of the 2017 Tax Cuts and Jobs Act were made permanent, including current tax brackets and increased standard deductions. However, some provisions, such as the increased SALT deduction cap and new deductions for tips, overtime, and car loan interest, are temporary and set to expire after 2028.

6. Increase in Lifetime Estate and Gift Tax Exemptions

In 2025, the inflation adjustment for the lifetime estate and gift tax exemption was quite significant: $690,000. For those who had already maxed out their exemption prior to 2025, this offers an additional opportunity to move money out of their estate—as much as $1.38 million for a married couple. While this isn't something that has to be done within the calendar year, you should take it into account when making future plans.

Regarding annual exclusion gifts, you can make gifts up to $19,000 to as many beneficiaries as you like, which can help reduce your estate's value without using any of your lifetime gift and estate tax exemption.

7. Other End-of-Year Thoughts

Tax-loss Harvesting. Investment losses can be used to offset any gains you've realized in 2025, or up to $3,000 of income. Consider selling depreciated securities that no longer fit your strategy, have poor prospects for future growth, or can be replaced with similar investments that play a similar role in your portfolio.

New Bonus Deduction for Older Adults. Individuals aged 65 and older may qualify for an additional standard deduction, subject to income limitations.

Child Tax Credit: The Child Tax Credit has increased to $2,200 per qualifying child.

8. Maximize Retirement Savings and Health Savings Accounts

IRA and Roth IRA contributions have an April 15, 2026, deadline, but employer-sponsored retirement plans need to receive contributions by December 31, 2025. Your contribution to an HSA also needs to be received by December 31, 2025.

9. Use Your Flexible Spending Accounts

Flexible Savings Accounts (FSA) follow a “use it or lose it” rule. If you funded an FSA with pre-tax dollars, be sure to use it to its full advantage. Spend down all money that you would otherwise lose on January 1, 2026.