Year-end is an ideal time to take stock of your financial picture and prepare for the tax law changes that have resulted from the One Big Beautiful Bill (OBBBA). Proactive planning now can help you preserve deductions, avoid surprises, and position yourself for 2026 and beyond.
1. Share Major Life or Financial Changes
Keeping us informed ensures your tax and financial plan stays aligned with your goals. Please notify us of:
- Marriage, divorce, births, or deaths
- Inherited IRAs
- Foreign investments or accounts
- New business or investment activities
- Significant purchases, sales, or liquidity events
2. Maximize Contributions to Tax-Advantaged Accounts
Reducing taxable income is one of the simplest planning wins.
- Max out contributions to 401(k)s, IRAs, HSAs, and employer retirement plans.
- Review your eligibility for catch-up contributions.
- Fully use FSA balances before they expire.
- Evaluate 529 plans—unused amounts may be eligible for a Roth IRA rollover for beneficiaries.
3. Strategic Charitable Giving
With OBBBA introducing tighter charitable deduction limits for high-income taxpayers starting in 2026, 2025 may be an advantageous year to give.
- Make year-end charitable contributions to lock in current rules.
- Consider a Donor-Advised Fund (DAF) for large gifts in high-income years.
- If you’re 70½ or older, use a Qualified Charitable Distribution (QCD) from an IRA—this can also satisfy RMDs tax-efficiently.
4. Capital Gains, Losses & Investment Planning
Tax-efficient portfolio management is especially important heading into 2026.
- Harvest gains or losses thoughtfully to manage your overall tax liability.
- Use losses to offset gains.
- Take advantage of favorable long-term capital gain rates when possible.
- Keep detailed basis records—especially for digital assets, where tracking can be challenging.
5. Estate & Gift Planning
The current window for strategic gifting remains open.
- Use the annual gift exclusion ($19,000 per person; $38,000 per couple).
- Review and update estate plans before OBBBA-related changes take effect.
- Consider using the Federal lifetime estate and gift tax exemption ($13.99M in 2025) and ($15M in 2026) to lock in planning.
- Washington state continues with a lower estate exclusion of $2.193M up to 6/30/2025 and $3M starting 7/1/2025.
6. Retirement Income & RMD Planning
Efficient withdrawal planning can prevent unnecessary taxes.
- Plan Required Minimum Distributions (RMDs) to avoid bunching income into higher tax brackets.
- QCDs can satisfy RMDs while keeping taxable income lower.
- Coordinate Social Security timing, retirement account withdrawals, and Medicare thresholds.
7. Optimize Available Tax Credits
- Review eligibility for credits like the Child Tax Credit, education credits, and energy-efficiency incentives.
- Evaluate HSAs and FSAs for health-related tax savings.
8. Estimated Taxes, Withholding & Cash Flow
- Rising underpayment penalties make accurate withholding important—let us review your estimates.
- Prepare for liquidity needs tied to year-end tax payments or expected 2026 rule changes.
9. Business & Investor Tax Planning
For business owners, accelerated planning before December 31, 2025, is key.
- Bonus Depreciation: Confirm qualifying assets are placed in service before year-end to capture 100% bonus depreciation.
- Excess Business Loss Limits: Monitor 2025 limits ($626,000 MFJ) and understand how disallowed losses become NOLs.
- 199A Deduction: Ensure qualification for the QBI deduction under existing phaseout rules.
- Consider timing for employee bonuses, executive compensation, rent prepayments, and inventory write-offs.
10. Prepare for OBBBA and 2026 Changes
- New limits on charitable deductions for high-income taxpayers
- Adjusted income tax brackets
- A modified estate and gift exemption in 2026
- Updates to pass-through deductions and business incentives
Planning ahead in 2025 allows you to take advantage of the current rules before these changes take effect.
