Year End Tax Planning Strategies to Keep More Money and Prepare for Future Wealth

The year – another interesting 12 months with the tariffs, persistent inflation, strong market performance, and also continued uncertainty – is already coming to a close. It’s time to make sure you are set up for a better future. Use this list of year-end tax planning tips to help you save money and grow wealth.

No matter what the future holds, below are 13 key end-of-year tax strategies to help you keep more of your own money.

YEAR-END TAX ADVICE #1: Strategize Roth Conversions Before the End of This Year

To count for 2025, a Roth conversion must be completed by December 31, 2025.

A Roth conversion is when you take money from a traditional retirement savings account and convert it to a Roth account.

Use the Roth Conversion Explorer in the Boldin Planner to understand the tax implications of doing a Roth conversion. Try different conversion goals – highest estate value, tax bracket limit, lowest lifetime tax liability, or up to an IRMAA limit. Come up with a conversion strategy that looks forward to lifelong wealth.

We recently updated the Roth Explorer to take current-year conversions into account to allow users to assess their opportunity for Roth conversions before the year’s end.

NOTE: You can also use the 2025 Roth Conversion Calculator. This standalone tool helps you compare estimated taxes when you do nothing, convert up to a specific threshold, or convert a custom amount.

#2: Make Moves Now that Benefit You in the Future

You’ll want to prep your taxes carefully this year. However, you should also plan for the future! Why? There are actually two key reasons:

1. Inaccurate future tax planning can result in a rather large error in your projections for retirement security
2. Forethought can help you retain much more of your hard-earned money

The Boldin Retirement Planner enables you to see your potential tax burden in all future years and get ideas for minimizing this expense. It takes forethought, but Roth conversions, taxable income shifts, and other strategies can result in significant lifetime savings.

Example: Strategize future Roth conversions

By transferring some of the money from your traditional IRA into a Roth IRA, you not only turn the money you moved into tax-free income in retirement, but it also helps to reduce your RMDs by lowering the balances in your traditional IRAs.

However, there’s one big catch: when you do a Roth conversion, you have to pay taxes that year on the money you moved to the Roth account. If you have a huge balance to convert, you may not be able to afford to do it all in a single year.

On the other hand, splitting the conversion out over five or ten years would reduce your annual and total tax bill for the converted money.

TRY IT OUT: Are you curious about how a Roth conversion will impact your finances? Try out the Roth Conversion Explorer, part of PlannerPlus. You can try different conversion optimizations to identify conversion strategies to meet your financial goals.

You can also model any Roth Conversion in the Boldin Retirement Planner. Log in and go to the “Money Flows” page in My Plan.

• Simulate the conversion under “Transfers”
• Then, look closely at your tax estimates, cash flow, and net worth at different points in time to assess whether this might be a good move for you or not

Learn more about Roth conversions and consider how possible future tax increases should impact your conversion strategy. (HINT: You want to convert when you are paying less in taxes.) Or, explore these Help Center articles on Roth conversions:

• How do I model Roth Conversions?
• How to use Boldin’s Roth Conversion Explorer?

#3: Reduce Taxable Income

The most basic and powerful way to cut your taxes is to cut your taxable income. You can do this in a number of ways: find sources of nontaxable income, use deductions to remove income from your taxable total, and grab any tax credits you qualify for.

Here are a few specific examples.

Try tax loss harvesting

If you sell investments that aren’t tucked away in a tax-deferred or tax-free retirement account, you’ll have to pay capital gains taxes on the profits you made from those investments. However, if you sold any investments at a loss in your taxable accounts during the same year, you can wipe out those gains for tax purposes and avoid paying the related taxes.

This approach is known as tax-loss harvesting, and it could be especially useful in 2025 if you sold any assets during any of the stock market dips.

Itemize deductions, and consider bundling medical and charitable deductions into certain years

Due to the passing of the One Big Beautiful Bill Act (or OBBBA) in July, the $10,000 limit on the state and local tax deduction was increased to $40,000 for tax years 2025 through 2029 for those with less than half a million in adjusted gross income (AGI). Therefore, many people in high-tax states may choose to itemize in 2025 when they didn’t in 2024. 

Because the threshold for deductions on medical expenses and charitable donations is relatively high, you may want to consider bundling those expenses into certain years and only claiming them every two or three years. For example:

Max Out Medical Expenses: By grouping as many non-emergency medical expenses as possible in a single year, you can maximize the deduction you get for those expenses. In 2025 you can only deduct medical expenses that exceed 7.5% of your adjusted gross income.

If you’ve already had some significant healthcare expenses for the year, see if you can move medical expenses that you’d normally take next year to the end of this one. For example, if you have a dentist appointment in January, move it to mid-December instead.

Long Term Care Insurance: If you recently purchased long-term care insurance, you may be able to deduct the premiums. The older you are, the more you can deduct. According to the American Association for Long Term Care Insurance, in 2025, the deductions range from:

• $480 for someone 40 years or less
• $900 for people older than 40 and younger than 50
• $1,800 for those 50-60
• $4,810 for those between 60 and 70
• $6,020 for someone over 70

Charitable Donations: Instead of making annual charitable gifts, give 2, 3, or even 5 years’ worth of donations in a single year, then take a few years off.

Focusing all of your donations in a single year increases the value of deductions beyond the threshold for a single year, and then you can take the larger standard deduction in the “skip” years.

A donor-advised fund may be a good option if you are bundling charitable expenses.

Donor-Advised Fund (DAF) definition: A donor-advised fund is a private fund administered by a third party and created for the purpose of managing charitable donations on behalf of an organization, family, or individual.

According to Fidelity, “A DAF may allow for tax-deductible contributions of cash or appreciated assets in a given year, but then control the timing of the distributions to charity in future years.” 

Still working? Max out your tax-advantaged savings!

For instance, the 2025 contribution limits are:

• $23,500 for elective-deferral contributions to 401ks, 403bs, 457s as well as Thrift Savings Plans. And, if you are 50 or older, the catch-up contribution is an additional $7,500. So, you can save a total of $31,000!
• Employees who are age 60, 61, 62, or 63 during the 2025 tax year and participate in a qualifying employer-sponsored plan may also take advantage of the “super catch-up” of $11,250 for 2025. So, an eligible individual could contribute up to $34,750 in 2025 ($23,500 regular limit + $11,250 super catch-up limit).
• $7,000 for traditional and Roth IRAs. And the catch-up contribution for people 50 or older is $1,000. So, you can save up to $8,000 with tax advantages. (To make the full Roth IRA contribution, your modified adjusted gross income (MAGI) must be under $150,000 if you’re single, or under $236,000 if you’re married and filing jointly.)
  • If your income exceeds the limits and phase-out ranges, you may still be able to contribute indirectly through a backdoor IRA strategy.

NOTE: You have until April 15, 2026 to make 2025 IRA and Roth IRA contributions.

And, remember that you can max out both kinds of savings vehicles. Use the Boldin Retirement Planner to see the impact of maxing out your savings!

If you are working, defer income

Depending on your future work prospects, you may want to push some of your income — like a bonus — out till next year.

The Boldin Retirement Planner gives you insight into future income and tax brackets, and can probably help you make this decision for future years.

#4: Beware of the AMT

The Alternative Minimum Tax (AMT) is figured separately from your regular tax liability. There are different rules, and you have to pay whichever tax amount is higher. It was designed to make sure that wealthy people were not getting too big a break with deductions, but it can also impact the middle class.

Accelerating tax deductions can trigger the AMT.

#5: Don’t Forget Your RMDs

Required Minimum Distributions (RMDs) are minimum amounts that IRA and retirement plan account owners generally must withdraw annually starting with the year they reach age 73. (Or, 75 if you were born in 1960 or later).

A report by the Treasury’s Inspector General estimated that more than 250,000 individuals failed to take RMDs in an earlier year. That is a costly mistake.

If yearly RMDs are missed or you don’t take enough to satisfy the requirements, you will incur a 25% penalty on the amount not taken on time. The penalty can be reduced to 10% if the RMD is corrected within two years.

Inherited IRAs: RMD relief ends in 2025

Beginning in 2025, the IRS will no longer waive penalties for missed RMDs from certain inherited accounts. This applies to inherited pre-tax accounts where the original owner died after 2019, had already begun taking RMDs, and left the account to someone who is a “(non-eligible) designated beneficiary.”

A noneligible designated beneficiary has to fully distribute the inherited account by the end of the 10th year after the year of the original owner’s death. However, in the case where the original owner was of their own RMD age, the beneficiary also needs to take a minimum amount of distribution from the inherited account each year along the way, and then still empty it before the end of the 10th year. 

If applicable, you will need to take this year’s RMD from the inherited account. The IRS will no longer be waiving the penalties, as of 2025.

How to calculate your RMD 

The Boldin Retirement Planner automatically accounts for RMDs for all of your wealth projections.  Starting at your RMD age, the calculator estimates RMDs based on IRS Publication 590-B.

NOTE: Qualified Charitable Distributions (QCDs) let IRA owners age 70.5 and over give up to $108,000 per individual in 2025 directly from an IRA to charity. QCDs can satisfy RMDs and keep the amount out of AGI.

#6: In a Low Tax Bracket? Pick Up Capital Gains

Tax-loss harvesting is good if you have sold stocks that have lost money. However, if you somehow eked out gains, now could be a good time to sell stocks that have appreciated significantly in value.

This can be a particularly good strategy if you are in the 10% and 12% tax brackets, since your capital gains tax may be zero.

If you sell, you can then repurchase your positions, which resets the basis and minimizes the amount of tax to be paid on future gains.

Even if you’re not in one of the lowest tax brackets, you may still want to sell winning stocks to reset the basis if you’re also harvesting losses.

#7: Pay Attention to the Medicare Surtax and Net Investment Income Tax for High Earners

There are two types of Medicare tax that could be affected by your income level.

The additional Medicare tax

This tax is on any income  (wages, compensation, or self-employment income) that exceeds the threshold amount for your filing status. According to the IRS, “The 0.9% Additional Medicare Tax applies to individuals’ wages, compensation and self-employment income over certain thresholds, but it does not apply to income items included in Net Investment Income.”

The income thresholds for the Additional Medicare (and NIIT) Tax are:

• $200,000 for single or head of household filers
• $250,000 for married couples filing jointly

However, the additional .9% tax only applies to the income above the threshold limit. (So, if you earn $250,000, the first $200,000 is subject to the regular Medicare tax of 1.45% but you will pay an additional .9% on $50,000.)

Employers are responsible for withholding the Additional Medicare Tax from wages it pays in excess of $200,000 in a calendar year, without regard to your filing status or wages paid by another employer.

The Net Investment Income Tax (NIIT)

The Net Investment Tax, on the other hand, is a 3.8% tax on investments if your income exceeds the same thresholds as the Additional Medicare Tax (given above). These are the types of investments subject to the tax:

• Interest, dividends, and other gains on stocks, bonds, and mutual funds
• Capital gain distributions from mutual funds.
• Gains from real estate in the form of rent or sales
• Royalties

According to the IRS, “If you are an individual who is exempt from Medicare taxes, you still may be subject to the Net Investment Income Tax if you have Net Investment Income and also have modified adjusted gross income over the applicable thresholds.” This is particularly relevant for people who have RMDs on tax-advantaged retirement accounts.

Check your taxable income in the Boldin Retirement Planner’s Tax Insights.

#8: 65 or Older? Know that You Have a Higher Standard Deduction

If you take the standard deduction instead of itemizing, your standard deduction is higher if you are over 65. (The Planner factors this into federal income tax estimates.)

For the 2025 tax year, the standard deductions are:

• Single,
  • Younger than 65: $15,750
• Head of Household,
  • Younger than 65: $23,625
• Married Filing Jointly,
  • Younger than 65: $31,500

NOTE: Single people over age 65 may claim an additional standard deduction of $2,000. Married individuals filing jointly can claim an additional $1,600 each.

Beginning in 2025 and continuing through 2028, individuals aged 65 or older may also claim a separate “bonus deduction” of up to $6,000 per qualifying individual. The deduction is available whether or not the taxpayer takes the standard deduction or itemizes.

The bonus deduction begins to phase out when a taxpayer’s Modified Adjusted Gross Income (MAGI) exceeds $75,000 for single filers and $150,000 for married couples filing jointly when both spouses are age 65 or older. It is fully phased out at $175,000 MAGI for single filers and $250,000 for married couples filing jointly (both 65+).

#9: Know How Your Social Security Benefits Are Taxed

Social Security benefits are taxed only if your income exceeds a certain threshold.

Federal taxes: Income for federal taxes is defined as up to 85% of your Social Security benefits (depending on your income), plus all other taxable income and some nontaxable income including municipal bond interest.

State taxes: You also need to know your state’s rules on taxing Social Security benefits if you live in one of the 10 states that do.

Check out the Boldin Tax Insights to see your projected future tax burden.

#10: Thinking of Relocating in 2026? Consider the Best States to Retire in for Taxes!

Most of the wisdom shared above is most relevant to federal taxes.  However, state taxes can take a big bite out of your retirement nest egg as well.

If you are considering relocating for retirement, you might as well look at states that have the most favorable tax rates for retirees.  You can try modeling the relocation as a scenario in the Boldin Retirement Planner and compare the estimated tax differences.

#11: 529 Plans

529 plans provide federal tax-free growth and tax-free withdrawals for education expenses.  Additionally, there may be state tax credits or deductions for your contributions to these plans.

However, consider carefully about when to tap this resource.  Allowing the money to grow in the tax-deferred account may produce greater tax savings rather than withdrawing it now.

#12: Make Thoughtful Gifts to Family and Friends

Year-end is also a good time to think about financial gifts to loved ones. While these gifts don’t reduce your taxable income, they can be a powerful way to transfer wealth over time without triggering gift tax filing requirements. 

For 2025, you can give up to $19,000 per person without needing to file a federal gift tax return. 

For example, if you want to help your niece with $25,000 towards furnishing her first home, you could give $19,000 this year and the remaining $6,000 early next year. That keeps both gifts within the exclusion limits and avoids the need to file Form 709. 

NOTE: Even if you exceed the annual exclusion, most gifts won’t be taxable, but the IRS still requires reporting them.

#13: Consider Getting Professional Help

When you’ve got a lot of financial balls in the air, your tax return can get remarkably complicated. This is especially true if it’s the first year you’re taking a required minimum distribution. In that case, strongly consider getting a tax pro (a CPA or enrolled agent, not an uncertified tax preparer) to do your return for you.

A CERTIFIED FINANCIAL PLANNER is another great resource for year-end tax advice (and proactive tax planning)!  Look for one that specializes in retirement planning.  Boldin Advisors is a low-cost option that uses the power of technology to deliver better advice.

Conclusion: Tax Strategies That Set You Up for Future Strength

Year-end tax planning isn’t just about saving for now—it’s about reinforcing your long-term financial foundation. These tax strategies—from Roth conversions to bundling deductions, from managing RMDs to leveraging medical deductions—work together to help you keep more of your money today and guide your growth tomorrow. Use the Boldin Retirement Planner to model these strategies side by side. This ensures your choices align with your savings playbook and build confidence in your future.

FREE Discovery Session: Interested in learning more about financial advice? Learn more here. Or, book a FREE Discovery Session with a CERTIFIED FINANCIAL PLANNER to talk about your needs and what you can do to be wealthier and more secure.

FAQs: Tax Strategies for Year-End Planning