Year-End Planning: Key Strategies for 2025
September 23, 2025
As 2025 winds down, it’s the perfect time to take stock of your financial picture and make sure you’re positioned for success in the year ahead. Year-end planning is more than just checking items off a list—it’s about capturing opportunities before they disappear, avoiding costly mistakes, and preparing for what’s next.
This year’s planning carries even greater importance thanks to the One Big Beautiful Bill Act (OBBBA), signed into law on July 4. The legislation introduces new tax breaks and planning strategies that, in many cases, are available only for a limited time.
Here are the top areas to focus on before December 31:
1. Optimize Taxes and Income
Tax planning is always important, but year-end brings a chance to fine-tune. Consider strategies such as:
● Reviewing income and deductions to confirm you’re in the most favorable bracket.
● Harvesting losses to offset gains, or capturing gains while in a lower bracket.
● Exploring Roth conversions (keeping in mind they can’t be undone).
● Checking withholding and estimated payments to avoid penalties.
● Evaluating deductions for medical expenses that exceed 7.5% of AGI.
New OBBBA opportunities include:
● A deduction for certain tip income and overtime pay.
● An extra deduction for taxpayers 65 and older.
● A temporary increase in the state and local tax (SALT) deduction cap to $40,000.
Pro tip: Some provisions are retroactive to 2025, so they should be incorporated now.
2. Strengthen Retirement and Savings
Retirement and savings accounts remain one of the most powerful ways to build wealth. By year-end, make sure you have:
● Maxed out 401(k), IRA, and HSA contributions (including catch-up contributions if eligible).
● Taken required minimum distributions (RMDs) where applicable.
● Reviewed contribution elections for 2026 to align with your goals.
● Used or rolled over any flexible spending account balances.
Looking ahead, OBBBA expands savings opportunities beginning in 2026, including broader HSA eligibility and new “Trump Accounts” for children born between 2025 and 2028.
3. Make Charitable Giving Count
Charitable gifts can reduce taxes while supporting causes that matter to you. Consider:
● Donating appreciated securities or cash.
● Using Donor Advised Funds to “bunch” contributions for maximum impact.
● Making Qualified Charitable Distributions (QCDs) directly from IRAs if you’re age 70½ or older.
OBBBA introduces new rules in 2026, including limits on itemized deductions and a modest below-the-line charitable deduction for non-itemizers. That means 2025 may be the best year to maximize the tax benefit of larger gifts.
4. Manage Debt and Cash Flow
Year-end is also a good time to check on day-to-day financial health:
● Use FSA or dependent care account balances before they expire.
● Review health insurance deductibles before scheduling procedures.
● Ensure liquidity for upcoming tax payments or large purchases.
OBBBA also created a new deduction for auto loan interest (for qualifying new vehicles purchased between 2025–2028), making this a timely area to review.
5. Take Advantage of Energy Credits (Before They Disappear)
If you’re considering solar, heat pumps, or an electric vehicle, don’t wait. Under OBBBA, energy tax credits expire at the end of 2025, with electric vehicle credits ending even sooner (September 30, 2025). Contractor delays and inspection bottlenecks may make last-minute action risky.
6. Refresh Estate and Gifting Strategies
Estate planning is about more than taxes—it’s about ensuring your wishes are honored. Key year-end actions include:
● Making annual exclusion gifts ($19,000 per person, $38,000 per couple).
● Contributing to 529 plans (including the five-year lump-sum option).
● Reviewing wills, trusts, and beneficiary designations.
OBBBA raises the estate and gift tax exemption to $15 million per person in 2026, creating opportunities for families to revisit advanced strategies.
7. Business Owner Considerations
If you own a business, year-end planning is especially critical. Consider:
● Funding SEP IRAs, Solo 401(k)s, or defined benefit plans.
● Timing business expenses for tax efficiency.
● Reviewing entity structure for tax optimization.
OBBBA restored 100% bonus depreciation, increased Section 179 limits, and made the 20% Qualified Business Income (QBI) deduction permanent—powerful tools for entrepreneurs to reduce taxable income.
8. Don’t Forget the Big Picture
Finally, review other areas of your financial life, such as insurance coverage, college savings, and anticipated windfalls (like stock option exercises or inheritances).
Closing Thought
The window to act on 2025 opportunities is closing fast, and the changes brought by OBBBA make this year-end especially important. By being proactive, you can strengthen your financial position now and prepare for the opportunities—and challenges—of 2026.
If you’d like help reviewing your year-end strategy, our team is here to guide you.
Sources:
Taylor, Debra. “Your 2025 Year-End Planning Guide for Clients." www.horsesmouth.com. 22 Sept. 2025. https://www.horsesmouth.com/your-2025-year-end-planning-guide-for-clients. Accessed on 23 Sept 2025.
Disclosure:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
This material is provided as a courtesy and for educational purposes only.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.