6 Smart Year-End Planning Moves
By: Charlotte Huger, CFP®
As the year wraps up, it’s the perfect time to review key planning opportunities that can potentially help reduce taxes, maximize savings, and set up a stronger start for next year. Here are six strategies to consider before December 31:
Charitable Giving
Make gifts before year-end to qualify for a 2025 deduction.
Consider donating appreciated assets instead of cash to avoid capital gains.
Use Donor Advised Funds for multi-year giving flexibility.
For those 70½+, Qualified Charitable Distributions (QCDs) from IRAs can satisfy RMDs tax-free.
Planning Point: Charitable giving can also reduce tax bills while supporting causes you care about.
Tax-Loss Harvesting
Use investment losses to offset gains and reduce taxable income.
Review portfolios for potential losses before year-end.
Avoid the wash-sale rule (no repurchase of identical securities within 30 days).
Turn market volatility into tax efficiency.
Planning Point: Check for automatic dividend reinvestments, which may trigger wash-sale violations.
Tax Diversification
Balance between taxable, tax-deferred, and tax-free accounts.
Helps manage future tax exposure, Medicare costs, and Social Security taxation.
Consider how a Roth conversion or Roth contributions could improve long-term flexibility.
Planning Point: A diversified tax strategy allows you to draw from the most efficient sources of income in retirement.
Roth Conversions & Contributions
Take advantage of lower brackets this year.
Conversions must occur by December 31 to count for 2025.
Many employer plans allow in-plan Roth conversions.
Review if after-tax contributions can be rolled to a Roth IRA.
Planning Point: Roth income may mean more flexibility later, especially when managing RMDs or Social Security tax exposure.
Use Your Tax Bracket Wisely
Stay aware of the 12% bracket threshold and 0% capital gains bracket.
May be able to realize gains or complete Roth conversions at very low tax cost.
Strategic income planning now can lead to major savings later.
Planning Point: Look at current income levels and identify any room for taxefficient moves before year-end.
New 2025 Deductions
Temporary deductions from the One Big Beautiful Bill Act create new opportunities:
Tip income deduction (up to $25,000).
Overtime pay deduction (up to $12,500).
Additional Senior Deduction ($6,000 per person age 65+).
Higher SALT cap ($40,000 for joint filers).
Planning Point: These deductions stack on top of the standard deduction, opening new ways to lower taxable income.
Conclusion
Year-end planning is about being proactive, not reactive. Let’s review your goals, tax picture, and investment plan before year-end to make sure opportunities aren’t missed.
A Roth IRA conversion – sometimes called a backdoor Roth strategy – is a way to contribute to a Roth IRA when income exceeds standard limits. The converted amount is treated as taxable income and may affect your tax bracket. Federal, state, and local taxes may apply. If you’re required to take a minimum distribution in the year of conversion, it must be completed before converting.
A Roth IRA offers tax deferral on any earnings in the account. To qualify for tax-free withdrawals, you must generally be age 59 ½ and hold the converted funds in the Roth IRA for at least five years. Each conversion has its own five-year period, and early withdrawals may be subject to a 10% penalty unless an exception applies. Income limits still apply for future direct Roth IRA contributions.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Securities and investment advisory services offered through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial. LPLE and LPL Financial are not affiliated with Pillar Wealth Partners
