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5 Year-End Tax Planning Tips to take now

Make the Most of the New Tax Rules Before Year-End

The OBBBA has shaken up the tax world - making many of the recent tax cuts permanent and adding a few opportunities that could work in your favor.

With the end of the year coming up fast, now’s the perfect time to take a quick look at your 2025 tax picture. A few smart moves before December 31 could make a real difference when it’s time to file. The sooner you start, the more options you’ll have to put your plan into action.

  1. Consider harvesting tax losses - Markets have had a strong year, which could leave you with a higher tax bill if you realized gains. To help manage that, consider tax-loss harvesting - selling investments at a loss to offset gains you’ve already taken or plan to take. It’s a simple, time-tested way to reduce your taxable income before year-end.

  2. Maximize the Impact of Charitable Giving - If you are planning to make charitable gifts, timing matters. Well-timed donations can help ensure deductions count for the tax year you intend. It may also pay to give more in 2025. Starting in 2026, the OBBBA trims charitable deductions by 0.5% of AGI and caps total itemized deductions at 35% for top earners. A gift made this year could be worth more at tax time than the same one next year.

  3. Max Out Retirement Contributions - If you’re eligible, aim to contribute the maximum to your retirement accounts before year-end. For 2025, limits are:

    • IRAs: $7,000 ($8,000 if you’re 50 or older)

    • 401(k): $23,500; up to $31,000 if you’re 50+; and $34,750 if you turn 60–63 in 2025

    You might also consider a Roth IRA conversion if you expect higher tax rates in the future, can cover the taxes from other funds, don’t plan to leave your IRA to charity, and want the assets to keep growing tax-free for years to come.

  4. Put Annual Tax-Free Gifts to Work - The annual gift tax exclusion lets you give to as many people as you’d like, tax-free. In 2025, you can give up to $19,000 per person - or $38,000 per donee if you’re married and splitting gifts. Many families use this opportunity to fund 529 educational savings accounts, where contributions grow tax-free and withdrawals for qualified education expenses avoid income and gift taxes.

  5. Get professional tax-planning advice - There are plenty of ways to strengthen your financial position before year-end, but the right move depends on your situation. Talk with your tax advisor about which strategies make the most sense for you. Weat Nova can collaborate with you to help align your tax planning with your long-term goals.

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