What’s Hatching
- It’s not too early to think about holiday spending. A simple budget that accounts for gifts, travel, and entertaining can help you enjoy the season without the January regret. Reach out to schedule a quick check in with your Wealth Strategist if you want help managing your plan!
- If you have a Flexible Spending Account, now is a good time to check your balance. Many FSAs have a December 31 use-it-or-lose-it deadline, and unused funds don’t roll over. Stock up on eligible items, schedule that appointment you’ve been putting off, and make sure you’re not leaving money on the table.
- October means we’re officially in the final quarter of the year. Don’t give yourself a fright by waiting until the last minute on RMDs and year-end charitable giving. If either applies to you, don’t let those deadlines sneak up on you like things that go bump in the night!
Welcome back to Bird’s-Eye View!
This month we are highlighting some key tax planning opportunities to seize before year-end. Coordinating these opportunities with your Wealth Strategist and CPA can help you avoid missing potential optimizations throughout your financial and tax planning.
And as always, if anything resonates or raises a question, we’re always happy to connect.
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Your Year-End Tax Planning Checklist
A few moves before December 31 could make a real difference
The end of the year is closer than it feels. And for most people, the window between now and December 31 is one of the best planning opportunities of the entire year. Several strategies that may help reduce your tax bill have hard deadlines. Once the calendar flips to January 1, those opportunities are generally gone until next year.
Your Advisor and Your CPA, Working Together
The strategies below can be worth reviewing with both your wealth strategist/financial advisor and your CPA before year-end. Your advisor can help identify what may apply to your situation. Your CPA can help you understand the tax impact. When the two work together, you are more likely to catch opportunities that might otherwise fall through the cracks.
Tax-Loss Harvesting
If you have investments that have lost value in 2026, selling them before December 31 may allow you to recognize a loss that could potentially offset taxable gains elsewhere in your portfolio. The rules around this strategy can be complex, and not every situation will benefit. Your advisor can review your portfolio and flag any opportunities worth discussing with your CPA before acting.
Roth Conversion
A Roth conversion involves moving money from a pre-tax retirement account into a Roth retirement account. You generally pay taxes on the converted amount in the current year, but future growth and qualified withdrawals from a Roth account are typically tax-free. For people who expect to be in a higher tax bracket in retirement, or who have had a lower-income year in 2026, this strategy may be worth considering. Your advisor and CPA should review this together, since the right conversion amount depends heavily on your full tax picture for the year.
Required Minimum Distributions
If you are age 73 or older, you are generally required to take a minimum distribution from your traditional IRA or retirement plan by December 31. Missing this deadline may result in a significant tax penalty. If you have not yet taken your RMD for 2026, this should be a priority before year-end.
Charitable Giving
Donations made to qualified charitable organizations by December 31 may be deductible on your 2026 tax return, subject to applicable limits and your individual circumstances. If you are age 70½ or older, you may also be eligible to make a Qualified Charitable Distribution directly from your IRA. This approach may allow you to satisfy part or all your RMD requirement while potentially keeping that distribution out of your taxable income. Your advisor can prepare the documentation your CPA will need to properly record this on your return.
Review Your Employee Benefits and Contribution Limits
Before the year ends, it may be worth reviewing whether your retirement plan contributions are on track, whether your FSA balance needs to be used, and whether any benefits elections should be adjusted. Contribution limits for 2026 may differ from prior years, and your advisor can help confirm you are not leaving available tax-advantaged space on the table.
A Final Thought
Year-end tax planning usually works best when your wealth strategist/financial advisor and CPA are working from the same information. If they are not already in regular contact, consider asking your strategist to connect with your CPA directly before December 31. That coordination, more than any single strategy, is often where the most meaningful planning happens.
If you have questions or want to review your situation before the deadline, please reach out to our team. We are glad to help.
Converting from a traditional IRA to a Roth IRA is a taxable event.
Year-End Tax Planning: Turning Tax Decisions Into Financial Planning Opportunities
As year-end approaches, tax planning becomes an important part of a well-coordinated financial plan. While tax preparation documents decisions that have already been made, tax planning focuses on the choices that may still be available before December 31.
The best place to begin can be with a tax projection. Your financial planner and tax professional can estimate your federal and state obligations using expected income, deductions, investment activity, business results, withholding, and estimated payments. A projection can identify a potential shortfall, reveal an overpayment, and help determine whether recognizing income or deductions this year supports your broader strategy.
Investment portfolios also deserve attention. If you have realized capital gains, tax-loss harvesting may help offset some of those gains. However, investment decisions should not be driven by taxes alone. Any sale should remain consistent with your risk tolerance, time horizon, and allocation targets. The wash-sale rule must also be considered before repurchasing the same or a substantially identical investment.
Retirement contributions offer another planning opportunity. For 2026, the employee contribution limit for many 401(k), 403(b), and governmental 457 plans is $24,500. The general catch-up contribution for eligible participants age 50 or older is $8,000, while a higher catch-up may apply to participants ages 60 through 63. The IRA contribution limit is $7,500, plus a $1,100 catch-up for those age 50 or older. Income limits, plan participation, and other eligibility rules can affect the appropriate strategy.
Charitable giving should also be coordinated with the rest of your plan. Donating appreciated securities may provide a charitable deduction while potentially avoiding capital-gains tax. Some investors may benefit from grouping several years of gifts into one year, possibly through a donor-advised fund, to help exceed the itemized-deduction threshold. Individuals age 70 1/2 or older may also want to ask whether a qualified charitable distribution from an IRA is appropriate.
Other year-end considerations include health savings account contributions, flexible spending account balances, required minimum distributions, Roth conversions, and the timing of stock compensation or business income. A Roth conversion, for example, may be attractive during a lower-income year, but the additional taxable income could affect Medicare premiums, taxation of Social Security benefits, or eligibility for other deductions and credits.
Business owners should integrate company decisions with their personal financial plans. Equipment purchases, retirement-plan contributions, owner compensation, estimated taxes, and the timing of revenue or expenses can influence both business cash flow and household wealth. A purchase should serve a genuine business purpose rather than be made solely to generate a deduction.
Effective year-end planning requires coordination. Before December 31, bring your tax professional and financial planner current information about your income, portfolio activity, charitable goals, retirement contributions, business results, and major life changes. The goal is not simply to minimize this year’s tax bill. It is to make tax-aware decisions that help support your long-term financial security, cash flow, and personal goals.
Contact Angie Finch:
734.474.8602 | [email protected] | www.angiefinchcpa.com
Angie is not affiliated or registered with CWM, LLC or Cetera Wealth Services LLC. Any information provided by Angie is in no way related to CWM, LLC or Cetera Wealth Services LLC or its registered representatives.
Additional Resources & Reading
Resource: The Goal of Tax Planning – 3 Ghosts
Smart tax planning isn’t just about this year’s bill, it’s about aiming to reduce what you pay over a lifetime. This resource identifies three tax planning “ghosts” that may be haunting your plan, from today’s tax environment to retirement and legacy planning.
Article: Tax Planning Considerations Every Pre-Retiree Should Know
Taxes don’t stop being a factor just because you’ve stopped working. This piece walks through 8 key tax planning considerations for pre-retirees, from RMDs and Social Security impacts, to withdrawal strategies and estate planning.
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This newsletter is not intended to provide specific legal, tax, or other professional advice. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.
The opinions contained in this material are those of the author, and not a recommendation or solicitation to buy or sell investment products. This information is from sources believed to be reliable, but Cetera Wealth Services, LLC cannot guarantee or represent that it is accurate or complete.
