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End-of-Year Tax Planning Tips

Written by Minich MacGregor Wealth Management on . Posted in Uncategorized.

Fall Into Smart Tax Planning

The end of the year is fast approaching. It’s a time for breathing in the crisp Autumn air; maybe taking a drive to see the fall colors. A time for holiday preparations and indulging in every pumpkin-flavored drink known to man.

But it’s also a time for tax planning.

Now, most people don’t see it this way. Taxes are for March or April; maybe even January or February if you’re feeling particularly ambitious. Right? Well, while that mindset is perfectly understandable, there are some very simple — but extremely savvy — steps you should take in Q4 to potentially minimize taxes and maximize your options.

Now, we here at Minich MacGregor Wealth Management do not provide tax advice, but we can coordinate with your CPA or tax professional. So, as the year winds down, here are seven tax-related items that we highly recommend you talk to your accountant about. 

  1. Review Your Priorities and Time Horizons. Tax planning — as opposed to tax preparation — is all about looking ahead. It involves determining your priorities, your needs, and your desires, figuring out your timeline for achieving them, and then aligning that timeline with your tax situation. The first part is my job. The second is where your tax advisor comes in. That makes this a good time to chat with your tax professional to make sure they are aware of your lifestyle spending needs, philanthropic goals, anticipated liquidity events over the next ten years, and so on. This becomes the steering wheel for every technical choice made later.
  2. Contribute to Retirement Accounts. One of the most important things you can do, from a tax standpoint, is ensure you have maximized your contributions to any retirement accounts you own before the end of the year. This is especially true of your 401(k), if you have one. All contributions to your 401(k) must be made by December 31 if you want to deduct them from your 2025 taxes. As a reminder, the 401(k)-contribution limit for 2025 is $23,500.1 (People over the age of 50 can contribute an additional $7,500.)

    With IRAs, you technically have a little more time – all the way up until next year’s tax deadline, which is April 15, 2026. But my advice is to take care of those contributions now, as it’s easy to forget in the hustle and bustle of the spring tax season. (Contributing earlier can also help you potentially take advantage of certain Roth IRA conversion strategies, but this is something we should talk about personally, so we won’t go into detail about that here.)

    The IRA contribution limit for 2025 is $7,000.1 (People over 50 can also make an additional $1,000 in “catch-up contributions” if they are behind in saving for retirement.)
  3. Take Advantage of Charitable Contributions. Most people donate to charity because they want to make a difference in the world. But philanthropy brings tax benefits, too. For example, if you itemize your deductions, as opposed to taking the standard deduction each year, you can deduct a portion of your donation to qualified organizations. (For the 2026 tax year and beyond, those taking the standard deduction can also claim a deduction on their charitable contributions, but for 2025, this option is solely for those who itemize.)

    Those who are age 70½ or older can also make a qualified charitable distribution(QCD) of up to $108,000 from their IRA to the charity of their choice.2 This is classified as a tax-free gift and is not considered taxable income. And if you are at least 73 years old, a QCD can apply to your required minimum distribution (RMD) for the year, reducing the amount of taxes you’d need to pay on it, and potentially even keeping you from moving into a higher tax bracket.
  4. Harvest Your Losses (the Right Way). As you know, when you sell an investment that has increased in value, you must pay taxes on your capital gains. But when you sell an investment that has decreased, you can declare a capital loss. A loss can often be used to offset the taxes you pay on your gains, thus reducing your overall tax bill. This is known as tax-loss harvesting, and when done accurately and consistently, it can increase your after-tax returns by 1%.3 Over time, this can make a big difference! But it’s important to do this mindfully. You should always keep the wash-sale rule in mind, which prohibits selling an investment for the tax benefits but then buying a similar security within thirty days before or after the sale. And you should never sell a high-quality investment just for the tax benefits, even at a loss.
  5. Optimize the Character and Timing of Investment Income. Along similar lines, being mindful about when and why you take income for your investments can have a surprisingly large impact on your taxes. By deliberately realizing or deferring gains, and by managing qualified dividend income versus income derived from interest, you can potentially reduce the amount of taxes you need to pay in the future. Now, this step requires some in-depth planning to be done properly, so we would be happy to chat with your tax professional if we can be of any assistance.
  6. Audit-Proof Your Documentation. No one has ever enjoyed going through a tax audit. The good news is that one of the best ways to avoid that stress is relatively simple: Ensure you have a clean, mindful documentation process. This involves the proper storage of your financial documents, knowing how long to keep each one, and most importantly, which documents are most important. Your tax professional should be able to give you guidance on this but let us know if you have any questions.
  7. Build a Baseline Tax Projection Before Tax Filing Season. Last, but certainly not least, work with your tax professional to determine:
    1. What your expected Adjusted Gross Income will be for 2025
    2. What ordinary and capital gains brackets you will likely fall under
    3. Whether you will have any exposure to the Alternative Minimum Tax. By doing this now, you will decrease the likelihood of any unpleasant surprises once tax filing season starts next year.

So, there you have it. Before the trees are bare, or you start planning for the holidays in earnest, work with your tax professional on these seven items. Not only will it help you enter 2026 with increased confidence, but it will benefit your financial situation for years to come. As always, please let us know if you have any questions or if there is anything that we can do to help!

Have a great autumn!

1 “401(k) & IRA limit increases,” Internal Revenue Service, https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000
2 Eligible IRA owners can donate up to $105,000 to charity in 2024,” Internal Revenue Service, https://www.irs.gov/newsroom/give-more-tax-free-eligible-ira-owners-can-donate-up-to-105000-to-charity-in-2024
3 Shomesh Chaudhuri, Terence Burnham, Andrew Lo, “An Empirical Evaluation of Tax-Loss Harvesting Alpha.”