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As we approach the end of the year, now’s the time to finish your 2025 tax planning. Actions taken before December 31, 2025 can help you maximize deductions, reduce your tax bill, and avoid surprises when filing your return by the April 15, 2026 deadline.
Review our updated tax checklist below to help stay organized. Print it out, mark the items that apply to you, and discuss them with your tax advisor.
Maximize Retirement Contributions
Ensure you are on track to reach the IRS limits for 2025 contributions:
401(k), 403(b), most 457 plans, and the Thrift Savings Plan
- Employee contribution limit for 2025: $23,500
- Age 50+ catch-up contribution: $7,500
- Total if 50 or older: $31,000
Traditional and Roth IRAs
- 2025 contribution limit: $7,000
- Age 50+ catch-up: $1,000
- Total if 50 or older: $8,500
SIMPLE IRA or SIMPLE 401(k)
- 2025 contribution limit: $16,500
- Age 50+ catch-up: $3,500
If you haven’t maxed out contributions yet, consider increasing your final December paycheck deferrals or making IRA contributions before Tax Day.
Review Capital Gains and Losses
Tax-loss harvesting. Consider offsetting realized capital gains by selling underperforming investments. Losses can offset gains and up to $3,000 of ordinary income.
Timing gains. If you plan to sell appreciated investments, consider whether waiting until 2026 will put you in a more favorable tax position.
Evaluate Charitable Contributions
- Ensure all charitable donations made in 2025 are documented.
- Consider donating appreciated stock rather than cash to avoid capital gains tax while still receiving a deduction if you itemize.
- If you plan to bunch or accelerate charitable giving to exceed the standard deduction threshold, complete those gifts before December 31, 2025.
And remember: Donor-advised funds remain a tool for larger, strategic giving, especially for high-income taxpayers.
Plan for Required Minimum Distributions (RMDs)
- If you turned 73 this year or are already past RMD age, ensure you take your full RMD from IRAs and most employer plans by December 31, 2025.
- The penalty for missed RMDs is 25% of the amount not withdrawn (potentially reduced to 10% if corrected quickly).
- If you don’t need the funds, consider a Qualified Charitable Distribution (QCD) of up to $108,000 for 2025, which can satisfy your RMD and exclude the amount from income.
Check Your Health Savings Account (HSA) Contributions
You must be in a qualifying high-deductible health plan (HDHP) and not enrolled in Medicare to contribute. The 2025 HSA limits are:
- Self-only coverage: $4,300
- Family coverage: $8,550
- Age 55+ catch-up contribution: $1,000
HSA contributions can be made up to April 15, 2026, but making year-end contributions helps maximize tax-free growth sooner.
Review Your Withholding and Estimated Tax Payments
- Use the IRS Tax Withholding Estimator or consult your advisor to confirm whether your 2025 withholding aligns with your tax liability.
- If you make quarterly payments, ensure your fourth estimated payment (due January 15, 2026) is sufficient to avoid underpayment penalties.
Use Education Savings Accounts
529 plans: Contribute before December 31 to qualify for any state-level tax deductions or credits that apply in your state. (And keep in mind that grandparents can also contribute, which can often be an overlooked estate planning tool.)
Coverdell ESAs: Total contributions per beneficiary are limited to $2,000 per year, and contributions must be made by December 31.
Consider Tax-Deferred Annuities
If you’re exploring long-term tax deferral strategies, consider whether a tax-deferred annuity aligns with your retirement and estate planning goals. Review fees, surrender periods, and alternatives before committing.
Review Your Estate Plan
- The annual gift tax exclusion for 2025 is $19,000 per recipient.
- Married couples may gift $38,000 per recipient using gift-splitting rules.
- Confirm that your will, trusts, and beneficiary designations reflect your current goals, especially after life changes such as marriage, divorce, new children, or major financial events.
Review Business Expenses and Deductions
If you are self-employed or own a business:
- Make sure all legitimate business expenses are recorded.
- Consider making planned equipment or technology purchases before December 31 to claim 2025 deductions.
- Ensure you’re maximizing the Qualified Business Income (QBI) 20% deduction if eligible.
Review Your Tax Bracket and Income
- The 2025 standard deduction is $15,750 for single filers, $23,625 for heads of household, $31,500 for married couples filing jointly, and $15,750 for married couples filing separately
- If you’re close to the next tax bracket, consider:
- Deferring income into early 2026
- Accelerating deductible expenses into 2025
- Increasing year-end retirement contributions
Final Thoughts
Taking time now to review your tax strategy can lead to meaningful savings and a more efficient filing experience in April. With updated IRS limits and evolving financial considerations, it’s important not to simply repeat last year’s plan.
Connect with your tax advisor to tailor these strategies to your specific situation. We are here to support you and help optimize your financial well-being for the year ahead.
If you have questions or would like guidance, please reach out — we’re here to help you finish 2025 strong and enter 2026 with confidence.
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