Year-End Financial Planning Checklist

By Anastasia Taber, CFP®

With the holiday season in full swing, many people are already thinking ahead to the clean slate a new year brings. But before you flip the calendar to January, there are several important steps you can take now to strengthen your financial footing. Waiting until the first of the year may feel easier, but acting sooner can open the door to valuable opportunities.

This year-end financial planning checklist can help you make the most of the remaining weeks of 2025 and position yourself for a strong start in 2026. Just remember—some of these strategies must be completed by December 31st to count toward the 2025 tax year, so it’s worth reviewing them now while there’s still time to act.

Assets & Liabilities

• Review your capital losses: Consider realizing losses to offset capital gains by 12/31. Any losses beyond your capital gain amount can be used to reduce ordinary income by up to $3,000. Should you have more than $3,000 in capital losses, record them, and carry them over for use in future years.

• Review any year-end capital gain distributions: If you own shares of a mutual fund or ETF, you will likely have end-of-year capital gain distributions. Many funds have provided estimates on capital distributions this year; some may be higher than expected, considering the good year so far in the markets. In this case, proactive tax strategies can be utilized to minimize tax liability and keep you from being surprised come April 15. 

• Review RMDs (required minimum distributions): If you are age 73 or older, or taking an RMD from an inherited IRA, here are some important points to keep in mind:

  • RMDs from multiple traditional IRAs can generally be aggregated together.

  • RMDs from inherited IRAs cannot be aggregated with traditional IRAs.

  • RMDs from employer retirement plans generally must be calculated and taken separately, with no aggregation allowed.

  • There is an exception for 403(b) plans, meaning RMDs from multiple 403(b)s can be aggregated.

  • If you’ve reached age 73 in 2025, you have until April 1st of 2026 to take your RMD, but you must also take your 2026 RMD by 12/31/26 as well. Every year thereafter, you must take your RMD by December 31.

  • Failure to take your RMD by 12/31 (except your first one) may result in a 25% tax penalty on the amount not taken. 

Tax Planning

• Do you expect your income to increase in the future? If so, there are several strategies that can help minimize your future tax liability, including:

  • Contributing to a Roth IRA or Roth 401(k)

  • Utilizing Roth conversions

  • If offered by your employer plan, consider making after-tax 401(k) contributions.

  • If you are over age 59½, consider accelerating traditional IRA withdrawals to fill up lower tax brackets.

  • If you are over 50 years old and earn more than $145,000 (indexed in the future) in 2025, any “catchup” contributions to an employer-sponsored retirement plan (e.g., 401(k)) will need to be made “after tax” with no tax deduction (i.e., a Roth contribution). If your company plan does not have a Roth component, you will not be able to make “catchup” contributions to the plan. Consider how this change affects your tax planning with your employer plan contributions for 2025.

• Do you expect your income to decrease in the future? If your income is higher currently, it’s wise to consider strategies to minimize your current tax liability. This can include contributions to traditional IRAs and 401(k)s instead of Roth accounts.

• Utilize capital losses or carryforward losses: Similar to taking a loss to offset a gain, you can take a gain to offset a realized capital loss. If you have more capital losses than gains to offset, you may be able to use the loss or carryforward to reduce your ordinary income by up to $3,000. 

• Keep your tax bracket in mind: If you are on the threshold of two tax brackets, you’ll want to defer income or accelerate deductions in order to keep your income in the lower bracket. Keep the following important thresholds in mind:

  • As an example, $197,300 single ($394,600 married filing jointly) is in the 24% tax bracket. Taxable income in the next bracket will be taxed at 32%.

  • If you haven’t maxed out your 401(k) for 2025, consider sending 100% of your final paychecks to your retirement plan to help prevent you from jumping into a new tax bracket. 

  • For taxable income above $533,400 single ($600,050 married filing jointly), any long-term capital gains will be taxed at the higher 20% rate.

  • If your modified adjusted gross income (MAGI) is over $200,000 single ($250,000 married filing jointly), you may be subject to the 3.8% Net Investment Income Tax on the lesser of net investment income or the excess of MAGI over $200,000 single ($250,000 married filing jointly). 

  • If you are on Medicare, consider the impact of IRMAA surcharges by referencing the new 2025 rates.

• Donate to charity: There are several ways to use your philanthropy to reduce your current-year tax bill. Consider tax-efficient strategies like:

  • Gifting appreciated securities

  • Making a qualified charitable distribution (QCD)

  • Bunching your charitable contributions or contributing to a donor-advised fund every few years to allow itemization in specific years

  • Bunching contributions into a donor-advised fund and completing a large Roth conversion in the same year may be an excellent strategy to help you save on taxes. 

  • Consider setting up and funding a donor-advised fund sooner rather than later. Places like Schwab Charitable fill up with requests and may not get to your account and contribution by 12/31.

• Monetary windfalls (inheritance, RSU vesting, stock options, bonus): Be sure to review your tax withholdings to determine if estimated tax payments are required. Working closely with your financial planner and/or tax preparer on a year-end projection can yield significant insights so you go into tax season with eyes wide open.

• Business owner tax considerations: Businesses have several year-end tax considerations, including:

  • Qualified Business Income Deduction: A business that produces pass-through income could be eligible for this deduction.

  • Consider the impact of a Roth vs. traditional retirement account and how it could affect taxable income and qualified business income.

  • Consider deferring or accelerating business expenses as a way to reduce overall tax liability.

  • If you follow the calendar tax year, you may have to open your retirement plan before year-end.

• What is your marital status heading into the new year? Your marital status as of December 31 can greatly impact your tax liability for the year.

Cash Flow

• Improve savings: If you have extra funds, consider the following ways to save:

  • If you have an HSA, you may be able to contribute $4,300 ($8,550 for a family) and an additional $1,000 if you are over age 55 and not enrolled in Medicare.

  • If you have an employer retirement plan, such as a 401(k), you may be able to save more, but because the rules vary as to when you can make changes, you must consult with the plan provider. The maximum salary deferral contribution to an employer plan is $23,500, plus the catch-up contribution if age 50-59 or over 64 is $7,500 per year. For those 60-63, the super catch-up is $11,250.

  • Saving more into your HSA or 401(k) may yield current-year tax deductions, helping you save on your tax bill. 

• Consider a 529 plan: If you have children who plan to attend college, a 529 plan is a great way to save. You can use your annual exclusion amount to contribute up to $19,000 per year to a beneficiary’s 529 account, gift tax-free. Alternatively, you can make a lump-sum contribution of up to $95,000 to a beneficiary’s 529 account, and elect to treat it as if it were made evenly over a five-year period, gift tax-free. And depending on your state, you may be eligible for a state tax deduction as well. 

Insurance

• Utilize any remaining FSA funds: If you have a flexible spending account with remaining funds, consider the following options: 

  • Some companies allow up to $660 of unused FSA funds to be rolled over into the following year.

  • Some companies offer a grace period up until March 15th to spend the unused FSA funds.

  • Many companies offer you 90 days to submit receipts from the previous year.

  • If you have a Dependent Care FSA, check the deadlines for unused funds as well.

• Check your health insurance deductible: If you’ve met your deductible for the year, consider incurring additional medical expenses this year. This will save on out-of-pocket costs since the deductible is already covered as opposed to waiting until next year when your deductible will reset. 

Estate Planning

• Review major life events: Have there been any changes to your family (birth, marriage, divorce, or death), or have you bought/sold any assets this year? If so, it’s important to review your estate plan to ensure your beneficiaries and inheritance instructions still align with your wishes.

• Lifetime gifting: Are there any gifts you still want to make this year? If so, you can make up to $19,000 in gifts per person per year without incurring gift taxes.

Miscellaneous

• Education planning: If you have children in high school or younger who plan to attend college, consider financial aid planning strategies like reducing income in specific years to increase financial aid packages.

Partner With a Professional to Make the Most of Your Year-End Financial Planning

No financial year-end financial planning checklist can cover every detail of your unique situation, which is why partnering with a fiduciary financial advisor can make such a meaningful difference. A fiduciary is legally committed to putting your best interests first, helping you make informed, confident decisions as you prepare for the year ahead.

At TABER Asset Management, we’re here to support you through every step of your year-end planning. If you’d like personalized guidance or simply want a second set of eyes on your financial picture, we’d be glad to help. 

Get started today by scheduling a 15-minute intro phone call online or reaching out to us at 703-380-0968 or invest@taberasset.com. 

About Anastasia

Anastasia Taber is an Associate Advisor and leads the financial planning services division at TABER Asset Management, an independent, fiduciary wealth management firm, in Alexandria, Virginia, and Des Moines, Iowa that strives to do one thing well: manage their clients’ money by creating wealth, building wealth, growing income, and preserving capital so they can experience financial freedom. Anastasia is a CERTIFIED FINANCIAL PLANNER® and has a Bachelor of Arts in English from Georgetown University. She has years of experience working for one of the largest REITS in the U.S., as well as in property management and accounting at a global law firm in Washington, D.C. Anastasia is passionate about exceeding her clients’ expectations and building caring, long-term relationships based on trust. She is known for being detail-oriented and committed to excellence in her work. Anastasia is a co-host on the Creating Wealth podcast. To learn more about Anastasia, connect with her on LinkedIn.