As December approaches, it’s a good idea to revisit your tax situation and identify steps that may help reduce your 2025 tax bill. Many opportunities disappear after December 31, so now is the perfect time to check in.
Review your income and deductions
If your income is higher or lower than expected, consider how this affects your tax bracket. You may benefit from strategies like accelerating deductions or deferring income where possible.
Explore Roth conversions
A Roth conversion can be a powerful long-term planning tool, especially in years with lower income. Converting a portion of your traditional IRA to a Roth means paying taxes now in exchange for tax-free growth and withdrawals in the future.
Consider tax-loss harvesting
Selling investments at a loss in a taxable account can help offset realized gains and reduce your overall tax liability. This should always be done thoughtfully, with an eye on your long-term plan.
Maximize retirement and HSA contributions
Be sure you’re on track to contribute the full amount to your 401(k), IRA, or HSA. Retirement and HSA contributions offer significant tax advantages.
Finalize charitable contributions
Year-end gifts can reduce your taxable income and support the organizations you care about. The method of giving matters, so consider appreciated securities, QCDs, or donor-advised funds.
Everyone’s tax situation is unique, and thoughtful planning now can help position you for a smoother tax season. If you’d like a year-end review, we’re here to help.
Disclosures
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.
This material was created using Artificial Intelligence (AI) tools.
