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December, 2025: End of Year Planning
As the year draws to a close, end-of-year financial planning is essential for staying on track and maximizing opportunities.
Start with a personal assessment of your financial goals—review progress and adjust for the coming year.
Tax considerations are critical; explore strategies like tax-loss harvesting or maximizing deductions before December 31.
If you’re subject to Required Minimum Distributions (RMDs), ensure they’re completed to avoid penalties.
Charitable giving can provide both personal fulfillment and potential tax benefits, especially through qualified charitable distributions.
Additionally, review retirement contributions, flexible spending accounts, and estate planning documents to ensure everything aligns with your long-term objectives. Taking these steps now can set the stage for a stronger financial future.
This is why I offer a Client Checkpoint Review during this time period and encourage clients to schedule with me to discuss these key planning issues and impacts.
Read below for more details and insights on End of Year Planning.
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Capital Gains, Losses, and Tax-Loss Harvesting Strategies
As year-end approaches, reviewing your investment portfolio for capital gains and losses can help you manage taxes effectively. Here’s what you need to know:
1. Understanding Capital Gains and Losses
Capital gains occur when you sell investments for more than you paid.
Capital losses occur when you sell investments for less than you paid.
Gains and losses are categorized as short-term (held for one year or less) or long-term (held for more than one year), each taxed differently.
2. Tax-Loss Harvesting Basics
Selling investments at a loss can offset taxable gains, reducing your overall tax liability.
Up to $3,000 of net losses can offset ordinary income each year, with excess losses carried forward.
3. Wash-Sale Rule
Avoid repurchasing the same or substantially identical security within 30 days before or after the sale, or the loss will be disallowed.
4. Strategic Considerations
Review your portfolio for opportunities to realize losses without disrupting your long-term strategy.
Consider timing gains and losses to manage your tax bracket and avoid surprises.
What This Means for You
Evaluate your holdings before December 31 to identify tax-saving opportunities.
Coordinate tax-loss harvesting with other year-end strategies like charitable giving and RMD planning.
Thoughtful planning can help minimize taxes and keep your investment goals on track.
Need help? Contact us to schedule a year-end review and ensure your capital gains and tax strategies align with your financial plan.
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Key Considerations for Required Minimum Distributions (RMDs)
As year-end approaches, understanding your RMD obligations is critical to avoid costly penalties and optimize your retirement strategy. Here’s what you need to know:
1. Who Must Take RMDs
Generally, individuals age 73 or older (as of 2025) must take RMDs from traditional IRAs and most employer-sponsored retirement plans.
Beneficiaries of inherited IRAs may also have RMD requirements.
2. Deadline and Penalties
RMDs must be taken by December 31 each year (except for your first RMD, which can be delayed until April 1 of the following year).
Missing the deadline can result in a 50% excise tax on the amount not withdrawn.
3. Calculating Your RMD
RMD amounts are based on your account balance and IRS life expectancy tables.
Review all retirement accounts to ensure you withdraw the correct total amount.
4. Tax Planning Opportunities
Consider qualified charitable distributions (QCDs) to satisfy RMDs while reducing taxable income.
Coordinate withdrawals with other income sources to manage your tax bracket.
What This Means for You
Confirm your RMD amount and withdrawal strategy before year-end.
Explore options like QCDs or partial Roth conversions for tax efficiency.
Proactive planning can help you avoid penalties and optimize your retirement income.
Need help? Contact us to schedule a year-end review and ensure your RMD strategy aligns with your financial goals.
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Understanding New Social Security Tax Breaks Under OBBBA
The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, introduced important changes that can significantly reduce taxes for retirees. Here’s what you need to know:
1. New Senior Tax Deduction
Starting with the 2025 tax year, taxpayers age 65 and older can claim an additional deduction:
Up to $6,000 for single filers
Up to $12,000 for married couples filing jointly
This deduction is in addition to the standard deduction and the existing age-based deduction.
Available for tax years 2025 through 2028.
2. Income Phase-Out Rules
Deduction begins to phase out for:
Single filers: income over $75,000
Joint filers: income over $150,000
Reduces by 6% for every $1,000 above these thresholds.
Fully phased out at:
$175,000 for singles
$250,000 for joint filers
3. Impact on Social Security Taxation
Social Security benefits are not completely tax-free, but this new deduction significantly lowers taxable income.
About 88% of retirees will pay no federal tax on Social Security benefits, up from 64% previously.
4. Other Related Provisions
OBBBA made permanent the higher standard deduction introduced under the Tax Cuts and Jobs Act, further reducing taxable income for all filers.
What This Means for You
If you’re 65 or older, review your income and deductions before year-end.
Consider strategies like charitable giving, RMD planning, and tax-loss harvesting to maximize benefits.
These changes make year-end planning more important than ever—don’t miss out on potential savings!
Need help? Contact us to schedule a year-end review and ensure you’re taking full advantage of these new tax breaks.
Additional Considerations and Resources