As the year winds down, we know how quickly calendars fill up. That's why fall can be an important time to evaluate your financial situation while there's still time to take action. Many of the strategies below are steps we proactively consider for clients this time of year. While not every item will apply to every household, we believe it's important to inform you how we evaluate opportunities to help align with your broader goals. Tax-Loss Harvesting Tax-loss harvesting is one of the tax strategies we monitor closely as we approach year-end. While long-term investing is always the foundation, there are windows when strategically realizing a loss can provide a real tax advantage. This involves selling an investment that has lost value and using the realized loss to offset capital gains. In some cases, you might be in a position to replace the investment with a reasonably similar asset. This is something we evaluate case by case, especially when a client has experienced gains earlier in the year. That said, tax-loss harvesting has specific rules. The IRS's wash sale rule, for example, prohibits repurchasing the same or substantially identical security within 30 days, or the loss could be disallowed. Understanding the type of gain—short- vs. long-term—is also important, as it might affect the tax treatment. We stay on top of these details to help stay aligned with your long-term approach. Roth IRA Conversions Another area we evaluate this time of year is whether a Roth IRA conversion might make sense. Converting a traditional IRA to a Roth IRA can offer long-term tax benefits, particularly if you expect your future tax rate to be higher than it is today. Qualified Roth withdrawals are tax-free as long as IRS rules are met, and the original Roth IRA owner is not subject to required minimum distributions (RMDs), which can make them a valuable tool in both retirement and estate strategies. But there's a trade-off: the amount converted is treated as taxable income in the year of the conversion, which can lead to a higher-than-expected tax bill. That's why we approach conversions strategically, sometimes phasing them in gradually or waiting for years where income is temporarily lower. As part of our broader tax-aware approach, we're always looking for windows where a Roth conversion could strengthen your long-term position and save your kids some taxes when you pass on your wealth. Charitable Giving While charitable contributions can happen year-round, we see a clear spike in December. In fact, nearly one-third of annual giving occurs in that month alone, and close to 10% happens in just the final three days.1 That's why we start discussing charitable strategies earlier in the fall. For eligible clients over age 70½, Qualified Charitable Distributions (QCDs) can be an efficient way to give. These allow you to directly direct up to $108,000 per person from an IRA to charity in 2025. For married couples filing jointly, that's $216,000 if each spouse donates from their respective IRA accounts. Eligible accounts include traditional IRAs, inherited IRAs, and even certain inactive SEP and SIMPLE IRAs. For clients subject to RMDs, a QCD can also satisfy that distribution requirement without increasing taxable income.2 We also evaluate whether appreciated securities can be donated in-kind, helping clients manage capital gains tax and potentially claim a deduction, or whether a Donor-Advised Fund (DAF) might be useful for larger, strategic giving approaches. Our role is to help you give in a way that's tax-smart and aligned with your philanthropic goals. Some donor-advised funds are considered mutual funds and are sold only by prospectus. The prospectus will provide information on charges, risks, expenses, and investment objectives and should be reviewed carefully before investing. Investment companies can provide a prospectus, or you may prefer to ask your financial professional. Catch-Up Contributions For clients still working, we also monitor year-end opportunities to increase retirement contributions, especially if you're 50 or older and eligible to make catch-up contributions. These additional contributions can be a valuable tool in long-term wealth building. Furthermore, starting in 2025, new provisions under the SECURE Act 2.0 expanded these limits even further for individuals turning 60, 61, 62, or 63 (but not age 64). If you fall into this age bracket and have questions, please contact our office to discuss your situation. Estate Document Review The end of the year is also a good moment to revisit estate strategies, especially as families gather for the holidays and reflect on what matters most. For many of our clients, estate coordination isn't a one-time event; it's something we revisit regularly, especially following major life changes such as births, deaths, marriages, divorces, or even a move to another state. We also encourage reviewing beneficiary designations, which often override wills and should reflect your current intentions. In addition, year-end is a smart time to confirm that documents like your power of attorney and healthcare proxy are in place and reflect your wishes. We're here to help make sure these pieces are current and coordinated with your full financial picture. If you're considering making gifts to family, remember that the 2025 annual gift exclusion allows you to give up to $19,000 per recipient without triggering gift tax.3 This can be a helpful way to manage your estate over time. 529 Contributions While 529 college savings accounts don't have a hard contribution deadline, we typically remind clients about these accounts before year-end because many states offer a state income tax deduction or credit, but only if contributions are made by December 31. These state-level incentives vary, but they can be meaningful. If gifting is part of your broader approach, note that the IRS allows up to $19,000 per beneficiary in 2025—or up to $95,000 using a five-year super funding strategy ($190,000 for couples who elect to split gifts). During the holidays, we also see more families use 529 accounts as an alternative to traditional gifts. Many accounts have streamlined tools that allow friends and relatives to contribute online, making education savings a family-wide effort.4 Bottom Line Before We Go We discussed many concepts and ideas, so we wanted to take a moment to explain the rules and restrictions for certain types of accounts. Remember, this article is for informational purposes only and is not a replacement for real-life advice. Consult your tax, legal, and accounting professionals before modifying your tax strategy. To qualify for tax-free and penalty-free earnings withdrawals, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under certain other circumstances, such as the owner's death. The original Roth IRA owner is not required to take minimum annual withdrawals. Once you reach age 73, you must begin taking RMDs from a traditional IRA in most circumstances. Withdrawals from traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Similarly, once you reach age 73, you must begin taking required minimum distributions from a SEP-IRA, Simple IRA, and other defined contribution plans. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. A 529 plan is a tax-advantaged college savings plan. Before choosing a plan, it's important to consider not only the state tax treatment but also any associated fees and expenses. The availability of a state tax deduction will depend on your state of residence, as state tax laws and treatment may vary from federal tax laws. If you make nonqualified distributions, earnings will be subject to income tax and a 10% federal penalty tax. Sources 1. Non-Profits Source, 2025 https://nonprofitssource.com/online-giving-statistics/ 2. Fidelity, June 2025 https://www.fidelity.com/retirement-ira/required-minimum-distributions-qcds 3. Charles Schwab, June 2025 https://www.schwab.com/resource/estate-plan-checklist?msockid=37a2e58496ac672b39a4f4af9742667d 4. Savingforcollege.com, May 9, 2025 https://www.savingforcollege.com/article/529-plan-contribution-deadlines |
1. Non-Profits Source, 2025 2. Fidelity, June 2025 3. Charles Schwab, June 2025 4. Savingforcollege.com, May 9, 2025 |
Smart Moves to Consider Before Year-End
September 19, 2025