As the calendar turns toward year-end, it becomes increasingly important to take stock of your financial situation and use every opportunity to improve your tax outlook. New rules, fresh deductions, and ongoing economic changes can all influence your overall tax liability. Taking time now to plan ahead can help you enter the new year in a stronger position.
This guide highlights notable tax updates, key deadlines, and planning ideas that may help reduce your tax burden. Whether you’re thinking about boosting retirement savings, exploring charitable strategies, or adjusting to life changes, we’re here to help you make thoughtful, informed decisions.
Temporary Tax Breaks You May Be Able to Claim
The One Big Beautiful Bill Act (OBBBA) introduces several new deductions available from 2025 through 2028. Taxpayers may claim up to $25,000 for qualified tips, up to $12,500 for overtime premiums (or $25,000 for married couples filing jointly), and up to $10,000 of interest paid on loans for new U.S.-assembled vehicles. Individuals age 65 and older may also benefit from a senior deduction of up to $6,000 for single filers or $12,000 for joint filers. Each of these provisions comes with income limitations and eligibility requirements, so contact us to determine whether you qualify.
Strategic Charitable Giving
Changes coming in 2026 may affect how charitable deductions work, making the timing of your contributions even more important. Several strategies can help maximize your tax benefits. Donating appreciated investments held for more than one year allows you to avoid capital gains tax while claiming a deduction for the asset’s fair market value. A donor-advised fund lets you make a deductible contribution now and distribute grants to charities over time. For individuals age 70½ or older, qualified charitable distributions can satisfy required minimum distributions while keeping the withdrawal out of taxable income—an especially valuable option for those who do not itemize. Donations of $250 or more require documentation from the charity.
Energy-Related Tax Credits
Incentives for clean vehicles, solar installations, and energy-efficient properties are scheduled to change or expire. If you are considering energy upgrades or environmentally friendly purchases, we can help determine whether they still qualify for federal tax credits.
Digital Assets
Digital assets include cryptocurrencies, stablecoins, Non-Fungible Tokens (NFTs), and similar blockchain-based property. Beginning in 2025, new IRS reporting rules apply. You may receive Form 1099-DA in early 2026 for certain transactions executed through a broker or digital asset platform. You are still responsible for reporting all taxable transactions, even if you do not receive a form. Maintaining detailed records—purchases, sales, exchanges, fees—is essential.
IRS scrutiny in this area continues to grow. Reach out if you need help navigating reporting or recordkeeping.
Estate and Gift Planning Opportunities
Beginning January 1, 2026, the federal estate and gift tax exemption rises to $15 million per person ($30 million per married couple), with inflation adjustments to follow. The annual gift exclusion increases to $19,000 per recipient for 2025 and 2026. These enhanced thresholds may present valuable opportunities to update your estate plan and transfer wealth more efficiently.
Changes to the State and Local Tax (SALT) Deduction
From 2025 to 2029, the SALT deduction cap increases to $40,000 ($20,000 for married filing separately), though higher-income taxpayers may see a phase-down. In 2030, the cap returns to $10,000. This temporary change may affect whether claiming the standard deduction or itemizing produces a better outcome.
Electronic IRS Payments and Refunds
A 2025 executive order requires the federal government—including the IRS—to issue all payments electronically starting September 30, 2025. Refunds will no longer be sent by paper check after that date. Taxpayers can continue using existing payment methods until the IRS releases updated guidance. Now is a good time to review your preferences and ensure your information is up to date.
Additional Year-End Planning Essentials
- Review Your Retirement Strategy. Maximize contributions to IRAs, Roth IRAs, and employer-sponsored retirement plans. Health savings accounts (HSAs) also offer valuable tax benefits for those eligible.
- Update Us on Major Life Events. Marriage, divorce, the birth of a child, the death of a family member, career changes, or launching a business can all affect your tax and financial plan.
- Capital Gains and Losses. Selling underperforming investments may help offset gains realized earlier in the year.
- Education Savings. Contributions to 529 plans may offer tax advantages, and recent rule changes offer greater flexibility in how funds can be used.
- Review Insurance and Beneficiary Designations. Make sure your records reflect your current circumstances and wishes.
- Senior Deduction. Starting in 2025, qualifying taxpayers age 65+ may receive an additional temporary deduction of up to $6,000 (single) or $12,000 (joint), subject to income limits.
- Required Minimum Distributions (RMDs). Generally beginning at age 73, RMDs must be taken annually from certain retirement accounts to avoid penalties.
- Roth Conversions. Converting a traditional IRA to a Roth can help lock in today’s tax rates and diversify your future tax exposure.
- Estimated Tax Payments. With federal underpayment interest at 7%, it’s important to confirm your withholding and estimated payments are on track.
Proactive Planning Helps Prevent Surprises
Acting before the year ends can help reduce your tax bill, but some effective strategies require time to put in place. Starting early gives you time to make informed decisions and the opportunity to obtain the best possible results. To schedule a personalized year-end review, please contact your Stephano Slack tax manager or partner at 610-687-1600 or TaxInfo@StephanoSlack.com.
Author Jackie Himes, CPA, partner, is a trusted authority in serving high-net-worth individuals and closely held businesses. She provides strategic financial guidance that fuels growth and sustainability. She can be contacted at 610-710-4057 or Jhimes@stephanoslack.com.
Disclaimer: This content is for informational purposes only and doesn’t constitute professional advice.
Recent Comments