Year-End Strategies-Handout #1 - Year-End Strategies

Handout #1 - Year-End Strategies

Pdf Summary

As the year-end approaches, it’s important to consider various tax and financial planning strategies before December 31 to maximize benefits, especially with new tax provisions beginning in 2025. Key upcoming changes include new deductions for qualified tips, overtime pay, auto loan interest, and an increase in the SALT deduction, child tax credit, and standard deduction, as well as specific provisions for seniors and charitable giving limits. These provisions will phase in or expire between 2025 and 2029, requiring careful attention to timing.<br /><br />Small business owners and sole proprietors can reduce their 2025 tax liabilities and grow retirement funds through 401(k) profit-sharing plans or defined benefit plans, each offering specific contribution limits and tax advantages but often needing professional administration.<br /><br />For charitable donors, gifting appreciated assets can avoid capital gains taxes, and qualified charitable distributions (QCDs) from IRAs are tax-efficient for those aged 70 or older, with limits indexed for inflation. Deduction limits vary based on charity type and asset gifted.<br /><br />Low-income years, such as retirement or job loss, create opportunities to benefit from 0% capital gains and low-income tax brackets, providing chances to rebalance investments or withdraw from IRAs at favorable rates, potentially reducing future required minimum distributions.<br /><br />Roth conversions are strategies for tax diversification, potentially saving taxes if future rates rise. Tax diversification—allocating assets across taxable, tax-deferred, and tax-free accounts—provides financial flexibility in uncertain tax environments. Assessing one’s current asset allocation and planning accordingly is recommended.<br /><br />Due to evolving tax laws and complex rules, consulting tax and financial professionals is strongly advised before implementing these strategies. Overall, proactive year-end planning can help optimize tax savings, retirement readiness, and charitable giving.

Keywords

year-end tax planning

2025 tax provisions

SALT deduction increase

child tax credit

small business tax strategies

401(k) profit-sharing plans

charitable giving tax benefits

qualified charitable distributions

capital gains tax strategies

Roth conversions