Tax planning remains a moving target. As we approach the end of 2025, taxpayers face a unique planning window shaped by recent legislation – and the potential expiration of major tax provisions at year-end.
The Tax Cuts and Jobs Act (TCJA), enacted in 2017, is scheduled to sunset after December 31, 2025. Unless Congress acts, many individual tax provisions – including lower tax brackets, the expanded standard deduction, and estate tax exemptions – are set to revert to pre-2018 rules in 2026. Layer in the ongoing effects of the SECURE Act and SECURE Act 2.0 on retirement planning, and it’s clear that proactive year-end tax considerations matter more than ever.
Consulting with your CPA before year-end can help ensure you remain compliant while positioning yourself to manage taxes efficiently – especially if your income, family situation, or investments changed in 2025. Below are nine key areas to review as the calendar year closes.
1. Compare Income Year Over Year
Is your income higher, lower or roughly the same as last year? The answer can drive important planning decisions.
If your income increased, you may need to adjust withholding or make additional estimated tax payments to avoid underpayment penalties – particularly if you are newly retired or earning income from multiple sources. Conversely, if income declines, you may be over-withholding and tying up unnecessary cash flow.
Be mindful of the IRS “safe harbor” rules, which can protect you from penalties if you meet certain prior-year payment thresholds.
Also note: while state and local property taxes paid before year-end may still be deductible, the $10,000 SALT deduction cap remains in effect through 2025.
2. Large Investment Sales or Portfolio Rebalancing?
If you sold investments or rebalanced taxable accounts this year, capital gains may significantly impact your tax bill.
This applies to inherited taxable investment accounts as well. While assets typically receive a step-up in cost basis at death, any appreciation after inheritance is taxable when sold.
Work with your CPA to:
- Estimate realized gains and losses.
- Identify opportunities for tax-loss harvesting.
- Coordinate gains with charitable giving or income-timing strategies.
Waiting until April may eliminate valuable planning flexibility.
3. Have You Received An Inheritance?
While inheritances themselves are generally not taxable income, what you inherit – and how you receive it – matters greatly.
Inherited retirement accounts follow complex rules:
- Most non-spouse beneficiaries are subject to the 10-year distribution rule under the SECURE Act.
- Required Minimum Distributions (RMDs) during that 10-year window may apply, depending on the original owner’s age and status.
- Inherited Roth IRAs are generally tax-free, but still subject to distribution timelines.
Because mistakes can be costly, inherited assets should always be reviewed with a CPA and financial advisor together.
4. Bought, Sold or Refinanced a Home?
If you sold a primary residence, you may be eligible to exclude up to $250,000 of capital gains ($500,000 for married couples) – provided ownership and use tests are met.
If you paid off a mortgage where points were being amortized, any remaining deductible points may be claimed in the payoff year.
For refinanced mortgages, points may still be amortized over the life of the loan, depending on the structure. Home equity interest remains deductible only when the loan is used to buy, build or substantially improve the home.
5. Coordinate Charitable Giving With Your CPA
Charitable planning remains one of the most flexible year-end strategies – but only when executed correctly.
Strategies to review include:
- Donating appreciated securities instead of cash.
- Bundling or “bunching” donations to exceed the standard deduction.
- Making Qualified Charitable Distributions (QCDs) from IRAs.
As of 2025:
- QCDs are available starting at age 70½.
- The annual QCD limit is indexed for inflation (over $100,000 per individual).
- QCDs can satisfy RMDs but do not generate a charitable deduction.
When done properly, QCDs can reduce taxable income without itemizing.
Related Reading: 10 Rules to Know About Qualified Charitable Distributions
6. Marriage, Divorce or Death
Major life events demand tax attention.
Marriage: Two earners may face higher combined marginal rates, while a single-earner household may benefit. Spousal IRA contributions may also become available.
Related Reading: 5 Reasons Why Couples May Need a Financial Advisor
Divorce: For agreements executed after 2018, alimony is not deductible by the payor nor taxable to the recipient. Dependency claims and asset division should be reviewed carefully.
Widowhood: A surviving spouse can typically file jointly for the year of death. Income changes, RMD rules, and future filing status all warrant review.
Related Reading: Maximizing Social Security Benefits: A Guide for Widows Between 60 and 70
7. Parents of College Students and Recent Graduates
The American Opportunity Tax Credit remains available, offering up to $2,500 per eligible student for the first four years of higher education.
Families should also review:
- 529 plan distributions.
- Education credits vs. deductions.
- Withholding adjustments for students or recent graduates working part-year.
Coordination helps avoid lost credits or double counting.
8. Newly Retired? Manage Your Tax Bracket Intentionally
Retirement often opens a window for strategic tax planning.
With earned income reduced – but before Social Security and higher RMDs begin – you may have opportunities to:
- Perform partial Roth conversions.
- Take withdrawals at lower marginal tax rates.
- Fill lower tax brackets intentionally.
Under SECURE 2.0:
- RMDs now begin at age 73
- Future increases are scheduled, but planning remains highly individualized
Bracket management is not about avoiding taxes – it’s about paying them strategically.
9. Understand How Recent and Upcoming Tax Laws Affect You
Between TCJA, SECURE, SECURE 2.0, and the One Big Beautiful Bill Act, the tax landscape is anything but simple.
The end of this year represents a critical planning crossroads. Decisions made now may have multi-year implications.
Tax planning isn’t a one-time exercise – and in a year like 2025, it’s especially important to be proactive.
Before year-end, coordinate with your CPA to review income, investments, retirement strategies, and life changes. Thoughtful planning today can help reduce surprises tomorrow – and ensure your financial decisions align with both current law and what may lie ahead.
Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.