As we approach the end of another year, this checklist provides helpful planning strategies to consider. Please consult with your tax and financial planning professional at Forvis Mazars to better understand how these strategies may impact your personal situation.
Retirement Planning
- Convert a portion (or all) of a traditional individual retirement account (IRA) to a Roth IRA. Conversions generally increase taxable income in the year of the conversion; however, Roth IRA conversions can be an effective tool in tax bracket management and planning for distributions in retirement.
- Make non-qualified IRA contributions and subsequently convert these traditional IRA contributions to a Roth IRA. This is often referred to as a “backdoor Roth IRA.” While limited to the annual IRA contribution limit ($7,000 + $1,000 catch-up for those over 50), if done over several years, the Roth balance could grow to a sizable amount during retirement. Learn more with our FORsights™ article, “Roth IRA Strategies for High Income Earners.”
- Check year-to-date 2025 retirement plan contributions and make additional contributions if allowed.
- Review the timing of IRA distributions to help with tax bracket management and make sure all required minimum distributions (RMDs) are taken.
- Roll unused 529 funds into a Roth IRA for the same beneficiary, subject to a 15-year account age, five-year contribution lookback, earned income requirement, annual Roth limit ($7,000 for 2025), and a lifetime cap of $35,000.
Charitable Giving
- For those age 70 ½ and above, gift up to $108,000 of income otherwise taxed as ordinary income directly from an IRA to a qualified charity via a qualified charitable distribution (QCD). For this purpose, the charity must be an Internal Revenue Code Section 501(c)(3) organization; private foundations, supporting organizations, and donor-advised funds (DAFs) do not qualify.
- Donate appreciated securities held for longer than a year from nonretirement accounts instead of cash to a charity. This approach avoids any tax liability associated with the gain while providing a deduction equal to the fair market value of the security gifted limited to 30% of adjusted gross income without regard to any net operating loss carryback.
- “Bunch” multiple years of charitable contributions into a single tax year to help push total itemized deductions above the annual standard deduction amount. This may also be helpful to reduce the impact of the new 0.5% charitable deduction floor and the new itemized deduction 35% ceiling taking effect after December 31, 2025.
- Pair the above “bunching” strategy with the utilization of a DAF to provide flexibility on the timing and determination of which charities to donate to while securing the charitable deduction in the current year.
- For more information on charitable giving, see our FORsights article, “Basics of Charitable Giving & Tax Planning Strategies.”
Estate Planning
- Review current estate planning documents, e.g., wills, trusts, medical directives, beneficiary designations, etc., to determine if any updates are necessary due to changes in personal situations or state/local laws. Don’t forget retirement plans, insurance policies, and investment accounts.
- Review all account-designated beneficiaries and review titling of accounts to reflect where those accounts will go upon your passing.
- Review or establish estate planning strategies considering the historically high estate and gift tax exemption rising to $15 million per individual ($30 million per married couple) in 2026.
- Consider cash gifts utilizing the annual gift exemption amount ($19,000 in 2025) per person without any reporting requirements or reduction of your lifetime exemption.
- Consider making gifts by paying medical or education expenses on behalf of another person. If payments are made directly to the institution, there are no reporting requirements, and the amounts do not reduce the lifetime exemption.
Income Tax Planning
- Review workplace withholdings for adequate tax withholding from paychecks and remember to incorporate year-end bonuses/business distributions in your tax planning.
- Review and take advantage of benefits within dependent care and/or medical flexible spending accounts (FSAs) and health savings accounts (HSAs). For more info on HSAs, see “HSAs: A Great Way to Save & Pay for Current & Future Medical Expenses.”
- If your state of residence offers a state tax deduction or credit for 529 plan contributions, consider making or maxing out your contribution by year-end to receive the deduction or credit on your 2025 tax return.
- Review and plan for any carryovers from prior years, such as net operating loss, passive activity loss, capital loss, business credits, and charitable contribution carryovers, to potentially make tax-effective decisions before year-end to benefit from any carryovers you may have.
- Review the deduction limits on state and local taxes and consider if pass-through entity tax payments are available to increase deductions.
- Consider availability of new deductions for tips and overtime wages, senior deduction for those age 65 and older, and car loan interest deduction for qualifying vehicles.
- Consider opportune timing for investing in Qualified Opportunity Zones to defer and reduce capital gains. For more details, read “Opportunity Zone Changes in the New 2025 Tax Act.”
- Consider availability of 100% bonus depreciation for assets placed into service after January 19, 2025 and 100% depreciation deduction for certain nonresidential real property used in manufacturing, production, or refining activities.
Investment & Insurance Planning
- Harvest any losses in nonretirement accounts to help offset realized gains while planning with the wash sale rule. Any realized losses carried forward from 2025 can help offset realized gains in future tax years.
- Analyze specific tax lots to determine the most appropriate shares to sell this year.
- Review year-end mutual fund capital gains distribution estimates for funds held in taxable accounts.
- Review the location of assets between traditional IRAs, Roth IRAs, and nonretirement accounts.
- Work with your Forvis Mazars Private Client professional to help you take an active approach in potentially improving your after-tax results by mitigating tax consequences.
- Review and update life, health, home, auto, and umbrella policies for adequate coverage.
To better understand how these strategies may help your personal situation, please contact a member of the Forvis Mazars Private Client team.
Forvis Mazars Private Client services may include investment advisory services provided by Forvis Mazars Wealth Advisors, LLC, an SEC-registered investment adviser, and/or accounting, tax, and related solutions provided by Forvis Mazars, LLP. The information contained herein should not be considered investment advice to you, nor an offer to buy or sell any securities or financial instruments. The services, or investment strategies mentioned herein, may not be available to, or suitable, for you. Consult a financial advisor or tax professional before implementing any investment, tax or other strategy mentioned herein. The information herein is believed to be accurate as of the time it is presented and it may become inaccurate or outdated with the passage of time. Past performance does not guarantee future performance. All investments may lose money.