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As 2025 winds down, now’s the time to make your money work a little smarter. From Roth conversions and tax-bracket management to charitable giving through Donor-Advised Funds, year-end planning isn’t just about saving on taxes — it’s about setting up 2026 from a position of strength.
This year brings added complexity with the new Big Beautiful Bill — but also new opportunities. Here’s what to focus on before December 31.
1️⃣ Start With the Classics: The Core Year-End Checklist
Even in a volatile policy year, the basics still matter most. Use these as your anchor points:
Harvest Tax Losses & Manage Capital Gains
If you have unrealized losses in taxable accounts, consider realizing them to offset gains or deduct up to $3,000 against ordinary income. If you expect mutual-fund capital-gain distributions in December, review positions early — it may be better to sell before distributions hit.
Mind the Brackets
For 2025:
• 24% bracket caps at $197,300 single / $394,600 joint
• Long-term capital-gains rates increase to 20% above $533,400 single / $600,050 joint
Staying below these thresholds can reduce your combined wage + capital-gains tax burden.
RMDs & Retirement Withdrawals
If you’re age 73 or older (or hold inherited IRAs), Required Minimum Distributions must be taken by December 31. Inherited IRAs cannot be aggregated with your own; 403(b)s are the one exception that allow aggregation.
2️⃣ Charitable Giving — Especially via Donor-Advised Funds (DAFs)
Charitable giving is always a key lever at year-end, and Donor-Advised Funds (DAFs) can enhance flexibility and tax efficiency.
Why Use a DAF:
• Immediate deduction in the year you contribute (if you itemize)
• Tax-free growth for invested balances
• Simplified single-receipt recordkeeping
• Flexibility to recommend grants later
📅 Deadlines & Highlights:
American Endowment Foundation (AEF) – www.aefonline.org
• Initial contribution minimum $25,000 • Grant minimum $250
• Processing time ≈ 1 week+ for cash / longer for stock
• Transfers of non-cash assets should be initiated by early December
Schwab Charitable (DAFgiving360)
• Online contributions: by 11:59 p.m. ET December 31
• Wires / EFTs / stock transfers: initiate by mid-November (2–6 weeks to settle)
• Checks: must be postmarked by December 31
• Minimum grant amount $50 • No minimum account balance or setup fee
Planning Tip: If you plan to gift appreciated stock or mutual-fund shares, start the process no later than mid-November to guarantee year-end credit.
3️⃣ The “Big Beautiful Bill” (OBBB): What’s Changing
The new legislation carries major implications for taxes, healthcare, energy, and business policy.
Higher Federal Deficits → Future Tax Pressure
CBO projects $2–3 trillion in added deficits over 10 years — likely fueling future rate increases.
→ Use current low brackets and Roth conversions while you can.
Healthcare & Medicare Shifts
Cuts to Medicaid and provider payments may raise costs for some households. IRMAA surcharges remain tied to MAGI.
→ Watch income thresholds on IRA withdrawals or property sales.
Regressive Tilt in Tax Cuts
The bill favors higher earners and business owners; cuts to social programs may offset benefits for others.
→ Revisit entity structure and QBI strategy.
Energy & Climate Incentives Rolled Back
Fewer clean-energy credits, expanded fossil fuel support.
→ Review portfolio exposure and rebalance if needed.
Policy Volatility Ahead
Court challenges and possible reversals in 2026 mean you should stay flexible.
→ Use scenario planning and dynamic spending rules.
4️⃣ Estate, Gifting & Family Updates
- Annual gift exclusion: $19,000 per recipient
- Lifetime exemption likely to drop by half in 2026
- Major life events (marriage, divorce, heirs, asset sales) = review your estate plan
5️⃣ Practical Reminders
- Use FSA balances before deadline ($660 rollover limit or March 15 grace period)
- If deductible met, schedule elective procedures before reset
- Update beneficiaries and check for expiring deductions
💡 The Takeaway: Act While You Still Have Leverage
Between the usual year-end tasks and the sweeping, still-evolving Big Beautiful Bill, this is the moment to:
• Lock in today’s tax rates
• Maximize Roth opportunities
• Finalize charitable gifts and DAF transfers
• Build flexibility for 2026 and beyond
At Sona Wealth, we help you turn legislative change into opportunity — turning complexity into clarity and uncertainty into action.
📅 Ready to Review Your Plan?
Schedule your 2025 Year-End Review before December 1 to capture every available advantage.
👉 Book a 45-Minute Call
Tags:
year-end planning, Big Beautiful Bill, donor-advised funds, Roth conversions, charitable giving, Sona Wealth
If you don’t have a plan and would like to get one, schedule an Intro Meeting:
To health and wealth!
Mark Struthers, CFA, CFP®, CRC®, RMA®
For current clients looking for a meeting:
This commentary is provided for general information purposes only, should not be construed as investment, tax, or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable, but is not guaranteed.
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