Are You Making the Most of Year-End Tax Planning?

As 2025 winds down, it is easy to focus on the holidays and push “money matters” to January. But this is one of the most valuable times of the year to pause, review, and plan. We believe in purposeful, proactive planning — and that includes taking advantage of the final months of the year to strengthen your financial position.

Why Year-End Planning Matters

Year-end tax planning is not about rushing to beat deadlines or making dramatic changes. It is about identifying small, strategic opportunities that can have an outsized impact on your future. From reviewing deductions to optimizing charitable giving, these thoughtful adjustments can help reduce your tax liability and create more financial confidence heading into 2026.

Smart Steps to Consider Before December 31

Here are a few simple but powerful ways to make the most of the year’s final quarter:

1. Review your withholdings and estimated payments. If your income has changed this year — maybe a raise, bonus, or investment gain — now is the time to adjust your withholdings. A small tweak today can prevent surprises at tax time.

2. Maximize retirement contributions. Boost your 401(k), IRA, or other retirement plan contributions before year-end. It is one of the easiest ways to lower taxable income while building your long-term financial security.

3. Evaluate capital gains and losses. If you have sold investments at a gain, consider offsetting those with losses elsewhere in your portfolio — a strategy known as tax-loss harvesting. It can help balance your tax exposure without changing your investment goals.

4. Make charitable giving part of your plan. Giving with purpose not only supports causes you care about — it can also benefit your tax picture. Donating appreciated stock, funding a Donor Advised Fund, or making a Qualified Charitable Distribution (QCD) if you are 70 ½ or older from an IRA can maximize your impact and your deduction. 5. Revisit your flexible spending and health savings accounts. Your Flexible Spending Account (FSA) balance does not roll over and must be used, or you will lose it, so plan to use those funds before year-end. And if you have a Health Savings Account (HSA), check that you are on track to maximize contributions for the year.

6. Take advantage of current deductions. In low-income years or with new/extended deductions in the OBBBA (One Big Beautiful Bill Act) you can potentially accelerate income at lower tax rates than you will pay in the future. Roth conversions not only accelerate income but also boost retirement savings.

The goal of year-end planning is simple: intentionality. By taking a closer look at where you stand today, you can make confident choices that align with your broader financial goals. Tax planning is not just about minimizing what you owe — it is about ensuring your resources support the life you want to live.

At Financial Life Advisors, we see year-end tax strategy as part of your larger financial journey — one that reflects your family, your priorities, and your future vision. Whether you are approaching retirement, managing business income, or simply looking for peace of mind, we are here to guide you every step of the way.

Small moves now can make a big impact later. Start your year-end review today and head into 2026 with clarity, confidence, and purpose.

Let’s plan for the life you want to live.

Investment Advisory and Financial Planning Services offered through Financial Life Advisors, LLC.

Financial Life Advisors (FLA) provides tax planning to assist clients in managing their financial affairs effectively. However, it's important to note that FLA is not a tax, legal, or accounting firm. While we strive to offer comprehensive financial guidance, our services are not intended to replace professional tax, legal, or accounting advice.