As the holidays approach and the year winds down, the flurry of festivities and to-do lists can easily take center stage. But amid the seasonal rush, it is important to focus on key year-end financial planning opportunities. This 2025 year-end financial checklist highlights 12 meaningful opportunities which can potentially yield significant tax savings, strengthen one’s financial preparedness and help ensure alignment with long-term goals.
Tax & Charitable Planning
Manage Tax Bracket Variability
Individuals should consider how their current tax picture compares to prior years, as there may be “levers” which can be used to produce considerable tax savings.
In higher-income years, individuals may wish to accelerate itemized deductions (most notably, charitable contributions) while deferring certain income items (such as the timing of a bonus payout, the sale of a business, the sale of certain investments or stock option exercises). Charitably inclined taxpayers may wish to use a donor-advised fund to recognize a larger current-year tax deduction while making charitable grants from the donor-advised fund at a future date and at the pace of their choosing.
The One Big Beautiful Bill Act (OBBBA) includes changes for charitable giving beginning in 2026. Charitably inclined taxpayers subject to the highest federal tax bracket should consider these new changes in coordination with their charitable giving plans.
- New AGI Floor: A new 0.5% of Adjusted Gross Income (AGI) floor will apply to most charitable donations, with the proportion of charitable giving above the floor being deductible.
- New 35% Cap: The legislation caps the maximum tax benefit for charitable deductions at 35%, which will thus result in a reduced tax deduction going forward for taxpayers in the 37% federal tax bracket.
In lower-income years, individuals may wish to defer itemized deductions (such as charitable contributions) while potentially accelerating certain income items (such as a bonus payout, investment sales, stock option exercises, Roth conversions, etc.). Charitably inclined individuals who are nearing retirement and who expect a significant drop in taxable income post-retirement might consider accelerating charitable donations (directly to charity and/or to a donor-advised fund) prior to retirement to maximize itemized deductions while in a higher income tax bracket.
Donate Appreciated Securities, Not Cash
It is estimated that December donations account for nearly a quarter (26%) of annual nonprofit revenue¹. As numerous nonprofit organizations request year-end donations, many individuals prefer the convenience of contributing by check or credit card. However, alternative giving methods may offer greater financial advantages. Individuals with long-term appreciated securities held in a taxable account should consider gifting such securities to charity. Why? The charitable organization receives the same economic benefit as a cash donation, while the taxpayer receives a tax deduction for the full market value of the gift and, importantly, avoids paying capital gains taxes on the gifted security.
Gifting appreciated securities can also provide a tax-efficient means to rebalance a portfolio by reducing exposure to a given asset class or a concentrated stock position, without incurring capital gains. Keep in mind the tax deduction for gifts of long-term appreciated securities to qualified public charities (including donor-advised funds) is limited to 30% of adjusted gross income (AGI) while similar gifts to a private foundation are limited to 20% of AGI.1 Charitable gifts in excess of the AGI limits result in a charitable carryforward which can be used over the next five years.
Satisfy Required Minimum Distributions (RMDs) via a Qualified Charitable Distribution (QCD)
SECURE Act 2.0 raised the beginning age for required minimum distributions (RMDs) to 73, yet eligibility to make a Qualified Charitable Distribution (QCD) remains at age 70½. With a QCD, taxpayers aged 70½ or older can donate up to $108,000 (as of 2025) from an IRA directly to eligible 501(c)(3) charities (note: donor-advised funds, private foundations and supporting organizations are excluded).2 This strategy may be particularly beneficial for charitably inclined individuals who receive a greater tax benefit from the increased standard deduction rather than itemized deductions.
Harvest Losses in Taxable Investment Accounts
Loss harvesting presents a potential “silver lining” for taxable investors to take advantage of market declines. Realized losses can offset realized gains (and potentially up to $3,000 of current-year ordinary income), with any unused/excess realized losses resulting in a loss carryforward to be applied against future gains.3 Admittedly, with global equities having generated significant gains over the last several years, investors may be left with few (if any) loss harvesting opportunities in taxable investment accounts, yet investors should still evaluate investment accounts for any unrealized losses.
Example*: Consider Barry and Susan Thomas, who have a joint account holding three actively managed equity mutual funds which collectively have $250,000 in unrealized losses. The Thomases sell the three positions and redeploy the sales proceeds to equity index funds. In doing so, they realize a $250,000 loss to offset current year (and/or future) realized gains, while their portfolio remains positioned to benefit from a subsequent market recovery.
*For illustrative purposes only.
Beware of the “wash sale rule,” which states that a loss cannot be realized for tax purposes if a substantially identical position was bought within 30 days before or after the sale.4
Analyze Mutual Fund Year-End Capital Gain Distributions
Mutual funds are required to pass along realized capital gains to fund shareholders. Regardless of whether the fund shareholder actually benefited from the fund’s sale of underlying securities, the shareholder will receive the capital gain distribution if the mutual fund is held as of the dividend record date. Mutual fund families typically provide estimates for year-end dividend distributions over the course of October and November, with such distributions most commonly paid in December.
Capital gain distributions can be either short-term or long-term. Short-term capital gain dividends are treated as ordinary income and thus cannot be offset by realized losses. In contrast, long-term capital gain dividends are treated as capital gains and can be offset by realized losses. Investors should compare a fund’s year-end distribution estimate against its unrealized gain/loss to determine if selling the position before the dividend record date would produce a tax savings.
In addition, investors should be careful with late-year purchases of actively managed funds in taxable accounts, as investing in a fund just prior to its capital gain dividend record date could result in additional taxes. An investor might instead choose to temporarily invest in a passive index fund and swap to the actively managed fund early the following tax year.
As you wrap up your year-end tax and charitable planning, remember that thoughtful action now can create meaningful savings and greater flexibility in the year ahead. These strategies—whether optimizing deductions, donating appreciated securities, or using tools like QCDs—serve as powerful building blocks in a broader financial plan. If you would like help evaluating which opportunities make the most sense for your situation, our team is here to provide personalized guidance.
- [1] Source: Schwab – “Is a Private Foundation Right for You?” (October 15, 2025)
- [2] Source: Forbes – “IRS Announces Retirement Contribution Limits Will Increase In 2025” (November 1, 2024)
- [3] Investopedia: “Capital Loss Carryover: Definition, Rules, and Example” (September 4, 2025)
- [4] Source: Investor.gov – “Wash Sales”