As the days grow shorter and the year winds down, fall is a natural time to pause and take stock of your finances. While many people wait until December to think about taxes, the earlier you begin preparing, the more options you have to position yourself wisely. Year end tax planning is about more than just minimizing your tax bill—it’s also about aligning your financial choices with your long-term goals.
Whether you’re looking to reduce taxable income, maximize savings opportunities, or ensure compliance with deadlines, a fall financial check-in can help you finish the year strong. Below are several key areas to review before December 31.
Review Tax-Loss Harvesting Opportunities
One of the most effective strategies in year end tax planning is tax-loss harvesting. This involves selling investments that are currently valued below their purchase price to offset gains from other investments. Realized losses can be used to offset capital gains, and if losses exceed gains, you can deduct up to $3,000 of the excess against ordinary income ($1,500 if married filing separately).
By harvesting losses before year-end, you can improve your overall tax efficiency while keeping your investment plan on track. Just be mindful of the IRS “wash sale rule,” which prevents you from claiming a loss if you buy the same or a substantially identical investment within 30 days before or after the sale. Your wealth management financial advisor can help you navigate these rules and help ensure your strategy aligns with your long-term portfolio goals.
Maximize Charitable Giving Before Deadlines
Charitable contributions made by December 31 can reduce your taxable income if you itemize deductions. This makes fall an excellent time to review your giving strategy and consider whether you’d like to make additional gifts before year-end.
Options to explore include:
- Cash donations to qualified charities.
- Donor-Advised Funds (DAFs): Contribute now, take the deduction this year, and decide later where the funds go.
- Appreciated securities: Donate stocks or mutual funds that have grown in value to avoid paying capital gains taxes while still receiving a deduction for the fair market value.
If philanthropy is an important part of your legacy, incorporating charitable giving into your year-end tax planning helps you support causes you care about while reducing your tax liability.
Check Your FSA and HSA Balances
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are valuable tools for managing health-related expenses in a tax-efficient way. But they come with deadlines and rules you’ll want to review before the year closes.
- FSAs: Many FSAs follow a “use it or lose it” rule, meaning funds must be spent by December 31 unless your employer offers a grace period or limited rollover. Check your balance now so you have time to schedule doctor visits, order prescriptions, or purchase eligible health items.
- HSAs: Contributions to HSAs can be made until the April tax deadline, but fall is a good time to assess whether you’re maximizing your annual contributions. HSAs offer a rare “triple tax advantage”: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
By reviewing these accounts now, you’ll avoid scrambling at the last minute and ensure you’re making the most of these tax-advantaged savings tools.
Don’t Overlook Required Minimum Distributions (RMDs)
If you’re age 73 or older (or 72 if you reached that age before 2023), you must take Required Minimum Distributions (RMDs) from traditional IRAs, 401(k)s, and other retirement accounts before December 31. Missing an RMD can result in a steep penalty—up to 25% of the amount not withdrawn.
For retirees who don’t need the full RMD amount for living expenses, consider using your distribution to fund charitable giving. A Qualified Charitable Distribution (QCD) allows you to transfer up to $100,000 directly from your IRA to a qualified charity, satisfying your RMD while excluding the amount from taxable income.
Plan for Year-End Transitions
The final months of the year are also a good time to look ahead to 2026 and beyond. Tax laws are subject to change, and proactive planning now can help you adapt to future adjustments. Key areas to consider include:
- Income timing: If you expect higher income next year, accelerating deductions or deferring income may make sense.
- Retirement contributions: Consider increasing your 401(k) and IRA contributions before deadlines.
- Gifting strategies: The annual gift tax exclusion allows you to give up to $18,000 per person in 2025 without incurring gift taxes.
By anticipating transitions now, you’ll step into the new year with clarity and confidence.
Bringing It All Together
Fall is a season of preparation, and your finances deserve the same attention as your home and holiday plans. Year end tax planning ensures you’re not only ready for April 15 but also aligned with your long-term financial goals.
From tax-loss harvesting and charitable giving to FSAs, HSAs, RMDs, and broader transitions, these strategies can have a meaningful impact on your financial well-being. The earlier you start, the more options you’ll have to take advantage of opportunities before the year closes.
If you’d like guidance tailored to your unique situation, our team at Voyager Wealth Advisors is here to help. Together, we can turn your fall financial check-in into a plan that supports your goals today—and for years to come.
Any opinions are those of Voyager Wealth Advisors and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of the strategy selected, including diversification and asset allocation.
Changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of these issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
RMD’s are generally subject to federal income tax and may be subject to state taxes. Consult your tax advisor to assess your situation.
401(k) plans are long-term retirement savings vehicles. Withdrawl of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to ages 59 1/2 , may be subject to a 10% federal tax penalty.
