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As the year comes to a close, so does the window for many important tax-planning opportunities. Key considerations include maximizing deductions, taking advantage of current tax laws, and planning for a more tax-efficient future.

In this episode of Money Wisdom, Jake Doser, CFP®, CPWA® and Nicholas J. Colantuono, CFP® break down five tax moves to make before the December 31 deadline.

1. Maximize Your Retirement Account Contributions

IRS contribution limits for 401(k)s, 403(b)s, and similar sponsored plans reset each year. For 2025, you can contribute up to $23,500 into your 401(k), and $31,000 if you’re 50 or older. If you’re between 60 and 63, that limit increases even further to $34,750.

Looking ahead to 2026, new rules will restrict pre-tax catch-up contributions for higher earners. If your plan does not offer a Roth option, you may lose the ability to make catch-up contributions altogether. Now is a critical time to speak with your tax planner or advisor about next steps.

2. Review Your RMD Strategy

Required minimum distributions (RMDs) are another major year-end planning item if you’re age 73 or older. If your accounts are subject to RMDs, you must complete them by December 31 to avoid penalties. RMD planning also matters for inherited accounts, especially under the 10-year rule. This rule requires heirs to fully empty inherited IRAs within a decade.

3. Complete Charitable Giving

Year-end planning can also be a powerful way to optimize your charitable donations. If you’re age 70½ or older, you can make qualified charitable distributions (QCDs) of up to $108,000 per year. Since you send the money directly from your IRA to the charity, it counts toward your RMD, and you avoid paying income tax.

4. Use Tax-Loss Harvesting

Tax-loss harvesting offers a unique opportunity for taxable investment accounts. Different investments move differently throughout the year, and some holdings may temporarily be at a loss. Selling an investment at a loss can offset taxable gains elsewhere, helping reduce what you owe on your tax return.

On the other hand, retirees in their low-income years might benefit from tax-gain harvesting. If your income is below certain limits, you pay 0% tax on capital gains.

5. Perform a Roth Conversion

Finally, you must complete any Roth conversions by December 31 to count for the 2025 tax year. Roth conversions are most beneficial during low-income years, before RMD age, or while married. The general idea is to fill up lower tax brackets now to avoid higher brackets later. This popular strategy can be a meaningful way to reduce taxes in retirement and in your lifetime.

Want clarity about your tax situation? Get your free Are You Paying Too Much in Taxes in Retirement? guide by texting “OFFER” to 800-757-0436.