ELLEVEST INSIGHTS

For many filers, February to April might not feel like a tight turnaround. But there are advantages to giving yourself a cushy December 31 deadline. 

Year-end tax planning allows you plenty of time to consider your unique tax situation, assess what you might do to reduce your bill, and make both necessary and beneficial adjustments. When you do end-of-year tax planning, you’re strategizing, not scrambling.

So, what might a year-end tax planning session look like?

If your filing is straightforward or circumstances haven’t changed much since last year, you might tick the boxes on this year-end tax planning checklist over an evening or two. Then sit back and wait for your W2 / 1099s to come to you.

If your filing is complex, has changed from last year (think: increases or decreases in salary), or you hit major life milestones, you might want to work through the checklist before you meet with your tax pro. It’ll help you make the most of your time together. Bonus: Scheduling your official check-in this far in advance should shake off some tax planning stress.

‍Get ready for tax season.

1. Download your pay stubs and end-of-year statements — bank accounts, credit cards, mortgage(s), student loans, investment accounts, etc. Save them in a folder for easy access.

2. Pull up last year’s taxes to refresh yourself on what you filed. Save this with your other tax documents — having it handy might save you time filling out information on certain tax software programs.

3. Check the balance on your Flexible Spending Account (FSA). Typically FSA funds are “use it or lose it” by year-end. So, plan to spend the funds ‌fully if your employer doesn’t offer a grace period or allow a rollover into the new year.

4. Review possible deductions for the year, including medical and dental expenses, child care expenses, educational expenses, mortgage interest, property taxes, etc.With the passing of the One Big Beautiful Bill Act (OBBBA) earlier this year, the state and local tax deduction (SALT) deduction was increased but also introduced phaseouts for certain income ranges. 

Assess any changes to your tax situation. Talk about making adjustments (or additional estimated payments) with your tax pro.

5. Did your income change this year — did your pay increase or decrease? Did you get a bonus?

6. Did you have any stock options vest?

7. Do you expect income to increase next year due to a promotion, new job, bonus, or equity compensation?

8. Did you recently add a baby to the family, purchase a home, or get married?

Make contributions to tax-advantaged accounts.

9. Contact your HR department to see if there’s still time to contribute to your traditional 401(k) by December 31. If so, contribute as much as you can. If you’re eligible for catch-up contributions (age 50+), this is the last year high-income earners will be able to do so on a pre-tax basis before the new OBBBA rules kick in. 

10. If you have an IRA, make a plan to max out your contributions by April of 2026. You must open and fund that account before April 15, 2026. If you plan to do a Backdoor Roth conversion, consider completing the steps by December 31, 2025.

11. If you have an HSA available, have already maxed out 401(k) and IRA contributions, and have more funds available, make a plan to max out contributions by April 15, 2026.

Make any donations to charity.

12. Look at your December budget and decide how much you want to give.

13. Choose a non-profit that aligns with your values. To be used in tax deductions, charitable giving donations must be made to 501(c)(3) organizations.

14. Donate one time (or set up recurring donations and give more in 2025!).

15. The passing of the OBBBA is set to change some parameters around how much of your charitable giving may be deductible in 2026 and beyond. It’s worth checking in with your tax pro to see if you should come up with a strategy (bunching donations, etc.) to take advantage of the time left for giving in 2025.