The last quarter of the year is crunch time for tax, retirement, and estate planning.
As December 31 approaches, opportunities for tax savings, retirement contributions, and estate updates start closing fast. Acting now could make a meaningful difference for your 2025 taxes and your 2026 finances.
Below is your 2025 year-end financial checklist, covering tax-loss harvesting, Roth IRA conversions, charitable giving, catch-up contributions, estate updates, and 529 college savings.
1. Tax-Loss Harvesting in 2025
Keywords: tax-loss harvesting 2025, capital gains offset, IRS wash sale rule
- Sell investments at a loss to offset capital gains.
- Deduct up to $3,000 in ordinary income losses if total losses exceed gains.
- Carry forward unused losses to future tax years.
- Avoid the wash sale rule, wait 30+ days before buying back substantially identical securities.
đź’ˇ Tip: Always consult a tax professional before selling to ensure compliance.
2. Roth IRA Conversion Before Year-End
Keywords: Roth IRA conversion 2025, Roth vs traditional IRA, RMD tax strategy
- Convert traditional IRA funds to a Roth IRA to enjoy tax-free withdrawals later.
- Avoid required minimum distributions (RMDs) in retirement.
- Ideal for those expecting higher future tax rates or planning wealth transfers.
- Remember: Converted amounts count as taxable income in 2025.
3. Year-End Charitable Giving Strategies
Keywords: charitable giving 2025, QCD IRA, donor-advised fund
- Qualified Charitable Distributions (QCDs): If age 70½+, donate up to $108,000 directly from an IRA.
- Donate appreciated securities to avoid capital gains tax.
- Realize losses on depreciated assets before donating.
- Fund a Donor-Advised Fund (DAF) for long-term giving flexibility.
4. Catch-Up Retirement Contributions
Keywords: 401k catch-up 2025, Secure Act 2.0, over 50 retirement contributions
- If age 50+, make additional contributions to 401(k), 403(b), 457(b), or SIMPLE IRA.
- Secure Act 2.0 boosts catch-up limits for ages 60–63 in 2025.
- Contributions must be made before December 31, 2025.
5. Year-End Estate Planning Updates
Keywords: estate planning 2025, annual gift exclusion, beneficiary designations
- Update estate documents after major life events.
- Review beneficiary designations for accounts, insurance, and annuities.
- Refresh powers of attorney and healthcare directives.
- Use the $19,000 annual gift tax exclusion for tax-free wealth transfers.
6. 529 College Savings Plan Contributions
Keywords: 529 plan 2025, superfunding, college savings tax deduction
- Many states offer deductions/credits for contributions before December 31.
- Annual gift tax exclusion: $19,000 per beneficiary in 2025.
- Superfunding option: Contribute 5 years’ worth at once, $95,000 (or $190,000 for couples).
- Consider gifting into 529s during the holidays.
âś… 2025 Year-End Financial Checklist
- Review investment performance
- Execute tax-loss harvesting if beneficial
- Consider Roth IRA conversions
- Make charitable contributions (cash, assets, QCDs)
- Max out retirement contributions (plus catch-up)
- Review and update estate plans
- Fund 529 college savings plans
Final Thoughts
The window to act is closing. Small actions before December 31 can lead to meaningful tax savings, improved retirement readiness, and better estate protection.