Put a Bow on 2025 With Our Year-End Tax Planning Checklist
Does your financial team provide you with comprehensive tax planning, or just annual tax reporting?
When you file your 2025 taxes next April, you're essentially just reporting your financial data from the previous year.
At Keen Wealth, tax planning is a proactive, year-round process we use to put your annual report in the best shape possible before the ink dries and windows close.
And when it comes to your 2025 tax return, some important windows are closing right now.
Today, on our 250th episode, we explore some recent changes to tax law and potential moves that you need to discuss with your financial advisor before the end of the year.
One Big Beautiful New Deduction for Seniors
Earlier this year, The One Big Beautiful Bill Act created a new $6,000 deduction for seniors age 65 and older, on top of the $2,000 deduction ($1,600 per person for couples 65 and older filing jointly) that already existed. This new deduction is available regardless of whether you itemize, but it is subject to phaseouts if your adjusted gross income is over $75,000 ($150,000 for couples). Deducting an extra $6,000 from your tax bill (or $12,000 for couples) could create some space to make larger withdrawals from retirement accounts or perform a Roth conversion without bumping you into a higher tax bracket.
More SALT
The Tax Cuts and Jobs Act of 2017 capped the State and Local Tax (SALT) deduction at $10,000. The One Big Beautiful Bill Act increased SALT to $40,000, with phaseouts at $250,000 for single filers and $500,000 for couples. Folks who pay high state and local taxes should talk with their advisors and CPAs about whether itemizing might be more beneficial than taking the standard deduction this year.
Giving Strategically
Recent increases to the standard deduction have minimized the tax benefits of itemized charitable giving. And starting next year, the One Big Beautiful Bill Act also caps deductions for the highest earners who do itemize at 35%. But smaller charitable gifts up to $1,000 (or $2,000 for couples filing jointly) are deductible even for folks who do not itemize.
Seniors 70 1/2 and older who have giving goals should consider Qualified Charitable Distributions (QCDs), which allow you to send money directly from your IRA to a qualified charity. QCDs also count towards your required minimum distributions (RMD) without counting as taxable income.
If you're thinking about making charitable contributions before the end of the year that could affect your 2025 taxes, don't wait much longer. At Keen Wealth, we encourage folks to mail out their checks (including QCDs) by Thanksgiving because the recipient needs to cash your check by December 31st for your gift to count for the current tax year.
Required Minimum Distributions
Seniors who are 73 and older must take required minimum distributions from their retirement accounts by December 31st annually to avoid penalties. Make sure you discuss how you’re sequencing your withdrawals, tax ramifications, and QCD opportunities with your advisor and tax professional before you take any distributions.
Harvesting Gains and Losses
Tax-loss harvesting could allow you to sell holdings that have lost value before the end of the year, lock in those losses, and lower your overall capital gains. You can then immediately reinvest in a similar (but not “substantially identical”) asset or wait 31 days and reinvest in the exact same security.
Folks in low tax brackets (including seniors who have low taxable income for the year) might also benefit from tax-gain harvesting. If you can sell holdings that have increased in value without hitting the top of the tax bracket, you might be able to realize long-term capital gains and pay $0 in taxes.
Family Gifting and Legacy Planning
In 2025, you can give up to $19,000 to any number of individuals without reporting the gift to the IRS or having it count against your lifetime gift exemption ($13.99 million per person for 2025 moving to $15 million per person in 2026). That means a married couple can jointly gift $38,000 to a child, grandchild, or anyone else without triggering tax consequences.
The end of the year is also a good time to review your estate plan: how you want to be cared for should you become incapacitated, how you want your assets distributed, who your beneficiaries and legal representatives are. You might also consider setting aside some time during holiday gatherings to discuss the broad outlines of your legacy plan -- not just who gets what, but also the values that unite your family and what kind of impact you're hoping to have for generations to come.
Counting Down to 2026
I know that adding more to your to-do list can be stressful during the holidays. But if you wait until next spring to start thinking about your 2025 taxes, there’s not much you can do other than gather statements.
Right now, there’s still time for my team at Keen Wealth to review your overall plan, your tax situation, and, potentially, some money-saving moves. Let’s put a bow on 2025 and start planning for a happy 2026.
About Bill
Bill Keen is a financial advisor with over 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
KWMG, LLC’s dba Keen Wealth Advisors (“company”) is an SEC Registered Investment Advisor located in Overland Park, KS. The company and its representatives may only conduct business in those states where registered or where excluded/exempt or from licensure. For registration information, please contact the SEC or the state securities regulators for the states where the company is notice filed. A copy of the company ADV is available upon request. Advisory services are only offered to clients or prospective clients where the company and its representatives are properly licensed or exempt from licensure. No advice may be rendered by the company unless a client service agreement is in place. This information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy and is for illustrative purposes only. Clients and prospective clients must consider all relevant risk factors involved with each strategy, including costs or fees, and their own personal financial situations before trading.
The views outlined in the book, Keen on Retirement Engineering the Second Half of Your Life, are those of the author and should not be construed as individualized or personalized investment advice. Any economic and/or performance information cited is historical and not indicative of future results. Economic forecasts set forth may not develop as predicted.
The Amazon Best Seller ranking listed on marketing materials is specifically referring to Best Seller rankings for the Kindle Top 100 Paid Lists under the subcategories of: Budgeting and Financial Risk Management, based on data as of September 5, 2019 and the second edition under Financial Risk Management on October 26, 2022. Amazon rankings although relevant on how a product is selling overall doesn’t necessarily indicate how well an item is selling among other similar items or similar item categories. Amazon may choose the most popular categories or subcategories within which an item has a high ranking to determine its best seller rankings. These rankings are updated hourly and as a result, should be expected to fluctuate as such. Keen Wealth Advisors and Amazon are not affiliated entities.
The Steve Sanduski Advisor Network, Belay Advisor, LLC and other third-party contributors to our blogs and podcasts are not affiliated with Keen Wealth Advisors.
For additional details on Keen Wealth Advisors, please visit https://www.keenwealthadvisors.com/important-disclosures.
20251203-5033969-15881569