Year-End Tax and Wealth Planning

Year-End Planning: Setting Yourself Up for a Strong 2026

As we head toward the end of the year, I always remind clients that a few smart financial moves before December 31 can make a big difference. This is the perfect time to review your accounts, look for tax-saving opportunities, and make sure your money is working as hard as it should be.

Here are some of the areas I like to focus on during year-end reviews.

Harvest Gains and Losses

If you’ve had a good year in the market, it’s worth looking at your taxable investment accounts. Selling some investments at a loss can help offset realized gains and lower your tax bill. This is called tax-loss harvesting. 

Maximize Retirement Contributions

If you haven’t maxed out your retirement accounts yet, now’s the time to do it. Contributions to your 401(k), IRA, or HSA can reduce taxable income and any growth is tax deferred. It’s one of the easiest ways to strengthen your retirement plan while also lowering what you owe this year.

Required Minimum Distributions (RMDs)

If you’re 73 or older, make sure your RMD is taken before year end. Missing it can lead to a steep penalty. Even if you don’t need the income, there are smart ways to use it, like directing it to charity or reinvesting it in a taxable account that fits your long-term plan.

Charitable giving can be both meaningful and strategic. If you’re 70½ or older, a Qualified Charitable Distribution (QCD) from your IRA can count toward your RMD while keeping that income off your tax return

Evaluate Cash Holdings

With interest rates still holding strong, it’s worth checking how your cash is working for you. Money market funds and short-term Treasuries are offering attractive yields right now. Don’t leave excess cash sitting in low-earning accounts if it could be doing more.

Consider Roth Conversions

For some people, converting part of a traditional IRA to a Roth IRA before year end can make sense, especially if you expect to be in a higher tax bracket later. A Roth potentially grows tax free and does not have RMDs. The conversion adds to your taxable income this year, but the long-term benefit can be significant when done strategically.

Annual Gifting

For 2025, the annual gift tax exclusion rises to $19,000 per person. Making gifts to family members is a simple and effective way to transfer wealth while reducing the size of your taxable estate. It’s also a great opportunity to help loved ones financially in a tax-efficient way.

Set New Financial Goals

Finally, take time to think about your goals for the new year. Has anything changed such as a new job, new home, or approaching retirement? Your plan should evolve as life does. I always encourage clients to start the year with a clear sense of direction both financially and personally.

Final Thoughts

Year-end planning is not just about checking boxes. It is about making sure your money aligns with your life. Reviewing these areas can help you make the most of tax opportunities, strengthen your investments, and start 2026 on solid ground.

This material is for informational purposes only and does not constitute tax, legal, or investment advice. Please consult a qualified tax professional regarding your individual circumstances.

A Roth IRA conversion—sometimes called a backdoor Roth strategy—is a way to contribute to a Roth IRA when income exceeds standard limits. The converted amount is treated as taxable income and may affect your tax bracket. Federal, state, and local taxes may apply. If you’re required to take a minimum distribution in the year of conversion, it must be completed before converting.

To qualify for tax-free withdrawals, you must generally be age 59½ and hold the converted funds in the Roth IRA for at least five years. Each conversion has its own five-year period, and early withdrawals may be subject to a 10% penalty unless an exception applies. Income limits still apply for future direct Roth IRA contributions.

Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.