Your 2025 Year-End Planning Checklist

With the end of 2025 fast approaching, you might want to check your financial to-do list to take advantage of planning opportunities, especially with the recent passage of the One Big Beautiful Bill Act (OBBBA). As we’ve shared previously, many aspects of financial planning warrant annual review. It is essential to ensure you are not missing any crucial deadlines and are optimizing where possible.

To simplify your year-end review and help keep you on track to achieve your goals, we have compiled the following financial checklist. As always, we suggest working with your CPA before making any significant changes to your strategy.

Income Taxes

With OBBBA provisions taking effect in both 2025 and 2026, a review of your 2025 tax projection with your CPA may be warranted to evaluate income-recognition flexibility, the timing of real estate tax payments, and the timing and amounts of charitable gifts and retirement plan contributions. The amount of suggested income tax withholding and estimated payments may also change.

For more information about these changes, click on each topic header below:

The following income tax related items are not impacted by the OBBBA:

• Capital Gains—Review the year-to-date realized capital gains in your taxable accounts for opportunities to recognize additional gains if your income is in the 0% bracket. If you own mutual funds in your portfolio, remember that they often make capital gain distributions in the fourth quarter.
• Tax Loss Harvesting—Consider harvesting capital losses to offset realized capital gains. If you sell assets for tax loss harvesting but want to maintain exposure to that asset, be sure to wait more than 30 days before re-purchasing the asset to avoid the wash-sale rule. Note that it doesn’t always make sense to harvest all of your losses. Further explanation can be found in our article Harvesting the Loss: When Does It Make Sense?.
• Tax Payments—If you haven’t paid enough in taxes this year or haven’t made your quarterly estimated payments, you may have options. If you are working, you can request additional tax withholding be taken from your paycheck before year-end. If you have an IRA, you can make a tax withholding distribution as well. These withholdings can help you prevent an underpayment penalty.
• Additional Taxes—The additional 0.9% tax on earned income and 3.8% tax on net investment income starts at a Modified Adjusted Gross Income or MAGI of $200,000 (single) or $250,000 (married filing jointly). If you are close to this threshold, consider if deferring income recognition is possible and makes sense.

Philanthropic Considerations

As a reminder, there are several ways to make gifts to charity: Donations in-kind, such as household items, clothing, and food; cash, including payments by check or credit card; and appreciated publicly traded securities. Donations of appreciated publicly traded securities should be shares held for over one year and can be donated directly to the charity, including to a Donor-Advised Fund or Private Foundation. If you are over age 70 ½, you may also make gifts to charity directly from your IRA, subject to limitations.

Evaluate your charitable gifting options:

• Taxpayers who itemize deductions may deduct up to 60% of their AGI for charitable contributions made with cash to public charities. Contributions exceeding that amount can be carried forward for up to five years.
• By comparison, gifting appreciated non-cash assets held for more than one year offers an additional tax benefit in that you will not pay capital gain tax on the appreciation of these holdings. The deduction for this type of donation is limited to 30% of AGI (20% if made to a Private Foundation).
• Bunching, or grouping multiple years of charitable gifts into a single year can allow for a bigger tax deduction in years with higher income. It can also allow you to itemize deductions in the years in which you bunch your charitable gifts to receive the tax benefit of the contribution and take the standard deduction in years in which you do not bunch or make charitable contributions. Timing and amounts of these gifts should be revisited considering changes introduced with OBBBA, such as the new SALT deduction (effective 2025), additional deduction for seniors (effective 2025), AGI floor for itemized charitable deductions (effective 2026), and the new cap on itemized deduction benefits for top earner (effective 2026).
• Beginning in 2026, taxpayers who do not itemize may claim an “above the line” deduction of up to $1,000 (Single) or $2,000 (Married Filing Jointly) for charitable contributions. This only applies to cash gifts and has some restrictions. If you don’t itemize and are considering sending cash at this level to charity between now and year-end, consider delaying the gift until January 2026. See Evan’s OBBBA article for more information.
• Individuals aged 70 ½ or older may make a Qualified Charitable Distribution (QCD) and directly transfer funds from their IRA to a qualified charity to satisfy some or all their Required Minimum Distribution (RMD) for the year. The maximum you can distribute from your IRA using a QCD is $108,000 in 2025. Our article on QCDs provides further details on this strategy and planning considerations.
  Reminder: Donor-Advised Funds cannot be the recipient of a Qualified Charitable Distribution.
• Charities, including Donor-Advised Funds and Private Foundations, must receive your gift by December 31, 2025, for you to claim the charitable deduction on your 2025 tax return. We recommend initiating stock gifts from your taxable account at Bragg Financial by the end of November to allow plenty of time for the transfer to be processed and received. Our custodians cannot guarantee that gifts of stock initiated after December 16 will be received by the designated charity by the end of 2025.

IRA Distributions

Take your Required Minimum Distribution (RMD) by December 31. This applies to Individual Retirement Account (IRA) and 401(k) account holders born in 1952 or earlier. It may also apply if you were born after this date and own an inherited IRA or Roth IRA.

• If you turn(ed) 73 in 2025, your first RMD is not due until April 1, 2026. However, if you defer your first distribution until then, you will need to take a second distribution before December 31, 2026.
• If you’re charitable, consider satisfying your RMD by giving directly to charity from your IRA. See our note on the QCD option above.
• Certain Inherited IRA/Inherited Roth IRA holders may also be subject to the RMD requirement. Reach out to your advisor if you have an inherited IRA and are uncertain about your requirements. Rules on RMDs and the age they must begin from inherited IRAs vary based on the year the original owner passed, your relationship to the owner, and whether the original IRA owner had reached RMD age prior to their death.
• Significant penalties apply if you fail to take your IRA required minimum distribution before December 31. To ensure enough processing time, be sure to request your distribution before December.

Gifts to Individuals and 529 Plans

The 2025 annual gift tax exclusion for gifts to individuals is $19,000 per person. Gifts must be received and, if a check, must be cashed by December 31, 2025. This includes gifts to 529 Plans, which must be deposited in time to be recorded on a 2025 statement.

The OBBBA expands the flexibility and utility of 529 education savings accounts, effective immediately. 529 funds can now be used for a broader range of K–12 education costs, such as curriculum, tutoring, online materials, standardized testing fees, dual-enrollment programs, and certain therapies for students with disabilities. Qualified expenses now include costs associated with obtaining and maintaining industry-recognized credentials, licenses, or certifications, such as tuition, exam fees, and continuing education through recognized programs. Starting in 2026, the annual cap for using 529 assets to cover K–12 tuition increases from $10,000 to $20,000.

The expanded uses of 529 plans make them an even more versatile tool for funding a child’s or grandchild’s educational journey, from private K–12 schooling to postsecondary credentials and even future retirement savings (see Marc Scavo’s article on how 529 funds can transfer to Roth IRA, subject to certain rules and limitations.) Consider front-loading 529-account contributions (up to 5 years’ worth of annual exclusion gifts) to maximize tax-free growth and future flexibility for the account beneficiary.

If you took a qualified distribution from a 529 plan this year, make sure the related qualified expenses are paid by December 31, 2025. For example, if you took a distribution from the 529 plan to pay for textbooks, make sure you purchase those textbooks by year-end. Also, as outlined in Empty Nest: Kids Out, Tuition Bills In! How to Use Your 529 Plan to Pay for College, you must receive reimbursements from the 529 Plan in the same calendar year you paid qualified expenses. For example, if you pay spring 2026 tuition in November 2025, your reimbursement for that tuition expense must come from the 529 plan in 2025.

Retirement Plans, Healthcare Accounts and Benefits

Review the information below for 2025 annual contribution limits for Retirement, HSA, and FSA Accounts.

Defined contribution plans: 401(k), 403(b), etc.

The last day to contribute to your 401(k) or Defined Contribution Plan for the current tax year is December 31. There are ways to contribute additional funds on an after-tax basis to these retirement plans. Read more about one option in Marc Scavo’s Mega Backdoor Roth Contributions and paying yourself first in  Making Extra Contributions for Retirement.

Additionally, individuals between the ages of 60 and 63 will be allowed to make enhanced catch-up contributions in 2025.

IRAs and Roth IRAs

The last day to contribute to your IRA or Roth IRA for the 2025 tax year is April 15, 2026.

See Roth IRA phaseouts for eligibility. If your income level makes you ineligible to make direct Roth IRA contributions, you can still consider making “backdoor” contributions. Many employers offer a Roth 401(k) option, which is not subject to these income limitations and is included in your defined contribution limit noted in the section above. Check with your advisor to determine what is best for you.

Consider a Roth conversion if you are in a lower bracket today than anticipated in future years.

Healthcare Savings Account (HSA)

The last day to contribute to your Health Savings Account (HSA) for the current tax year is December 31.

If you have a high-deductible health plan (HDHP), you can contribute to a HSA and, unlike the FSA, HSA balances don’t have to be spent down each year.

Flexible Spending Account (FSA)

The last day to contribute to your FSA for the current tax year is December 31. Be sure to spend the full balance by the required plan deadline. Remember, any funds you don’t use, you will lose.

Other Benefit Considerations

• Employer open enrollment period: Review any changes to your healthcare and benefit options available through your employer. Compare options to ensure you still have the right coverage for your circumstances. For group life insurance, if you are turning an age that ends in a zero or five, you may experience a significant increase in premiums. If the coverage is still warranted, consider pricing options for policies outside your group plan. Note: If you are nearing retirement, your group coverage may be portable, but this option often comes with a premium increase as well.
• Healthcare through the Health Insurance Marketplace: Confirm that the income you reported to the Marketplace is in line with your actual expected year-end income. If your income is substantially different, report the change by updating your application online, by phone, or in person. Your premiums for the remainder of the year will be adjusted accordingly. If your income is higher than initially reported, this adjustment will reduce the amount of the benefit you are required to pay back when you file your tax return.

Medicare Reminders

• Part D 2026 open enrollment dates are October 15 through December 7, 2025. Our partners at SHIIP (Seniors’ Health Insurance Information Project) have shown us how valuable it is to re-evaluate your prescription coverage annually.
• Part B premiums you will pay in 2027 will be based on your 2025 MAGI. While we don’t have the 2026 rates yet, the table at this link shows the 2025 rates based on 2023 MAGI ranges. If you are close to an increase in premium level based on the ranges shown below, consider whether delaying income to 2026 is a viable option.

Planning for 2026: Transfer Tax

With the passing of the OBBBA, the federal estate, gift, and goods and services tax (GST) tax exemption increases to $15 million per person in 2026, indexed for inflation (up from $13.99 million in 2025). Married couples can combine exemptions to pass $30 million tax-free. With this increased exemption, estate tax planning will become less of a concern for many taxpayers. As a result, income tax planning—particularly strategies to preserve or maximize basis step-up—will take on a more prominent role in long-term wealth planning. For those with larger taxable estates, the use of significant lifetime gifts to irrevocable trusts such as Spousal Lifetime Access Trusts (SLATs) or Dynasty Trusts could remain advisable.

If keeping your taxable estate below the exemption amount remains a concern, review the use of the unlimited gift exemption for direct payment of tuition and medical expenses. Read more in the articles Simple Solutions to Reduce Your Estate Tax and Maximizing Wealth Transfers to Minors.

The current interest rate environment also presents opportunities for advanced wealth transfer strategies, namely Qualified Personal Residence Trusts (QPRTs) and Charitable Remainder Trusts (CRTs). Phillips Bragg writes about these strategies in his article Hand-Me-Downs and Split-Interest Gifts.

Conclusion

We don’t intend this article to be an exhaustive list of all items to consider. Instead, we addressed a few of the most common tax and healthcare items that may be within your control. If you find yourself with time to spare, consider revisiting the following items annually: your short/mid/long-term financial goals, cash flow projections or retirement planning, your cybersecurity plan, reviewing your beneficiary designations, and your insurance and estate planning. If you would like a more comprehensive list of questions to review regarding your overall financial health and planning, please see the article Financial Planning 101.

Please reach out to us at Bragg Financial with any questions or if you would like to discuss this further. We advise you to work with your CPA to run tax projections before implementing any significant changes.

Definitions

¹ Adjusted Gross Income (AGI) is gross income less certain adjustments. AGI includes all taxable income, including wages, bonuses, self-employment income, taxable interest, dividends, capital gains, retirement distributions, annuities, rents and royalties, taxable social security income, alimony received (with agreements prior to 2019). The most common adjustments that reduce your AGI include one-half of self-employment tax paid, alimony paid (with agreements prior to 2019), pre-tax retirement/HSA plan contributions, student loan interest, and certain losses.

² Modified Adjusted Gross Income (MAGI) then adds back to your AGI certain deductions from above.

This information is believed to be accurate at the time of publication but should not be used as specific investment or tax advice as opinions and legislation are subject to change. You should always consult your tax professional or other advisors before acting on the ideas presented here.