We’re
in
early
December,
which
means
you
have
a
few
weeks
left
to
make
meaningful
adjustments
to
your
2025
tax
situation.
This
is
the
perfect
time
to
estimate
your
taxable
income
for
the
year
and
see
where
you
land
in
the
tax
brackets.
A
little
planning
now
can
save
you
thousands
in
April.
If
you’re
not
weaving
tax
planning
into
your
overall
retirement
and
investment
strategy,
you’re
most
likely
leaving
money
on
the
table.
And
I’m
not
talking
about
the
returns
that
show
up
on
your
401(k)
statement.
Having
a
401(k)
or
IRA
doesn’t
mean
you
have
a
retirement
plan.
A
proper
financial
plan
is
multifaceted—it
incorporates
investment
strategy,
tax
optimization,
estate
planning,
and
risk
management.
If
you
think
financial
planning
is
just
about
choosing
between
a
handful
of
stocks
or
an
index
fund,
you’re
missing
the
bigger
picture.
With
that
in
mind,
here
are
five
year-end
tax
planning
areas
to
focus
on.
These
are
the
low-hanging
fruit—the
opportunities
that
show
up
in
my
client
base
year
after
year.
This
isn’t
an
exhaustive
list,
and
not
everything
will
apply
to
your
situation,
but
chances
are
at
least
a
few
of
these
will
be
worth
exploring.
As
always,
consult
your
tax
planning
professionals
before
implementing
any
of
these
strategies.
This
outline
is
for
educational
purposes
only.
1.
Tax-Loss
Harvesting
Tax-loss
harvesting
involves
selling
investments
at
a
loss
within
your
brokerage
account
to
offset
realized
gains
elsewhere
in
your
portfolio.
This
can
minimize
your
overall
capital
gains
tax
bill.
Nobody
invests
hoping
for
losses,
but
they’re
inevitable.
Historical
analysis
shows
us
that
markets
rise
about
70%
of
the
time,
but
the
average
intra-year
drop
is
around
14%
according
to
JP
Morgan’s
Guide
to
the
Markets
research.
Taking
advantage
of
these
dips
can
create
tax
benefits.
But
just
because
you
sell,
it
doesn’t
mean
you’re
trying
to
sit
out
of
the
market.
You
sell
the
losing
position
and
immediately
buy
something
similar
but
substantially
different
to
maintain
your
market
exposure.
Just
watch
out
for
the
wash
sale
rule:
in
summary,
if
you
buy
the
same
or
a
substantially
identical
security
within
30
days
before
or
after
the
sale,
the
IRS
won’t
allow
you
to
claim
the
loss.
Any
losses
you
don’t
use
this
year
can
be
carried
forward
indefinitely,
and
you
can
deduct
up
to
$3,000
annually
against
ordinary
income.
2.
Tax-Gain
Harvesting
Tax-loss
harvesting
gets
all
the
attention,
but
tax-gain
harvesting
deserves
more.
Sometimes
it
makes
sense
to
intentionally
realize
gains
or
pull
income
into
the
current
year.
Why
would
anyone
want
to
increase
their
taxable
income?
Let
me
show
you
with
an
example:
For
long-term
capital
gains,
a
couple
filing
jointly
in
2025
can
have
up
to
$96,700
in
taxable
income
and
pay
0%
in
capital
gains
tax.
Remember,
taxable
income
is
what’s
left
after
deductions.
For
a
couple
both
age
65
in
2025,
the
deduction
math
looks
like
this:
-
Standard
deduction:
$31,500 -
Age
65+
additional
deduction:
$3,200
($1,600
per) -
New
senior
bonus
deduction:
$12,000
($6,000
per,
subject
to
income
limitations) -
Total
deductions:
$46,700
This
means
a
couple
could
have
adjusted
gross
income
of
$143,400
and
still
be
in
the
0%
capital
gains
bracket.
That’s
over
$10,000
per
month
in
spending—pretty
reasonable
for
many
couples
in
retirement.
Let’s
say
you
add
up
all
your
income
and
you’re
only
at
$110,000.
Does
it
make
sense
to
realize
some
capital
gains?
It’s
at
least
something
to
explore.
You’ll
increase
taxable
income,
but
if
done
correctly,
you
won’t
pay
a
dime
in
additional
capital
gains
tax.
This
strategy
works
particularly
well
in
the
early
years
of
retirement
if
you’re
delaying
Social
Security
or
IRA
distributions
and
spending
from
after-tax
brokerage
accounts.
And
just
like
tax-loss
harvesting,
the
goal
is
not
to
sell
your
positions
and
sit
out
of
the
market.
Remember
the
wash
sale
rule
mentioned
above
only
applies
to
losses.
If
you
like
an
investment
that’s
appreciated,
you
can
sell
it,
realize
the
gain
tax-free,
and
immediately
buy
it
back
without
missing
out
on
future
growth.
3.
Income
and
Expense
Timing
You
can’t
always
control
when
income
arrives
or
expenses
hit,
but
when
you
can,
timing
matters.
For
example,
the
One
Big
Beautiful
Bill
passed
earlier
in
2025
increased
the
state
and
local
tax
(SALT)
deduction
limit
to
$40,000
(up
from
$10,000)
for
2025,
subject
to
income
limits.
If
you’re
in
a
high-tax
state
and
you
haven’t
maximized
this
benefit
for
the
current
year,
you
might
consider
prepaying
your
2026
first-quarter
taxes
if
your
jurisdiction
allows
it.
This
lowers
your
2025
taxable
income
and
lets
you
maximize
the
deduction
again
in
2026.
This
benefit
only
runs
through
2028,
so
use
it
while
you
can.
You’ll
need
to
itemize
to
claim
this,
but
with
the
OBBB
changes,
it’s
worth
running
the
numbers
even
if
you
typically
take
the
standard
deduction.
On
the
income
side,
that
new
senior
bonus
deduction
might
make
it
worthwhile
to
pull
some
income
into
2025
to
take
full
advantage
of
your
available
deductions.
Or
consider
a
Roth
conversion
to
fill
up
lower
tax
brackets
in
low-income
years.
A
Roth
conversion
involves
moving
money
from
a
traditional
IRA
to
a
Roth
IRA,
paying
taxes
now
at
today’s
rates,
and
enjoying
tax-free
growth
and
withdrawals
later.
4.
Charitable
Giving
Strategies
If
you’re
charitably
inclined,
Qualified
Charitable
Distributions
(QCDs)
are
powerful.
Once
you’re
70½,
you
can
donate
directly
from
your
IRA
to
charity.
The
distribution
doesn’t
count
as
taxable
income,
and
it
satisfies
your
required
minimum
distribution
if
you’re
over
73.
Another
charitable
giving
strategy
involves
donating
appreciated
investments
from
your
brokerage
account
directly
to
a
Donor
Advised
Fund.
The
charity
gets
the
full
value,
you
avoid
capital
gains
tax
on
the
appreciation,
and
you
increase
the
cost
basis
in
your
brokerage
account.
Two
birds,
one
stone.
One
more
item
to
know—starting
in
2026,
there’s
a
new
0.5%
AGI
floor
and
a
35%
cap
for
top-bracket
donors.
For
example,
if
you
have
$400,000
in
income,
you’d
only
be
able
to
deduct
amounts
given
over
$2,000.
And
if
you’re
in
the
highest
tax
bracket,
your
deduction
is
capped
at
35
cents
per
dollar
donated.
Cash-gift
deductions
continue
to
be
capped
at
60%
of
AGI;
that
limit
has
not
changed.
This
creates
an
opportunity
to
accelerate
giving
in
2025
before
these
restrictions
kick
in.
5.
Retirement
Plan
Contributions
The
basics
still
matter.
Maximize
your
401(k)
employee
deferrals
before
December
31st.
Health
Savings
Accounts
and
529
education
funds
are
also
great
year-end
moves.
While
529
contributions
don’t
provide
a
federal
tax
deduction,
most
states
offer
a
state
income
tax
benefit—check
your
specific
state
rules.
One
exception
to
the
December
31st
deadline:
if
you
have
an
Individual
401(k)
and
it’s
the
plan’s
first
year,
you
have
until
the
tax
filing
deadline
to
establish
and
fund
it
for
the
prior
year.
This
can
be
useful
if
you
find
yourself
with
extra
cash
after
the
new
year.
Planning
ahead
makes
all
the
difference.
These
strategies
won’t
all
apply
to
everyone,
but
most
lawyers
approaching
or
in
retirement
will
benefit
from
at
least
a
few
of
them.
If
you
found
this
helpful
and
want
more
retirement
and
tax
planning
insights,
follow
along
with
Money
Meets
Law,
my
weekly
newsletter
where
I
dig
into
these
topics
in
more
detail.
I’ll
be
highlighting
several
of
them
over
the
next
few
weeks.
DISCLOSURE:
The
information
in
this
article
is
not
intended
as
tax,
accounting,
retirement
or
legal
advice,
as
an
offer
or
solicitation
of
an
offer
to
buy
or
sell,
or
as
an
endorsement
of
any
company,
security,
fund,
or
other
securities
or
non-securities
offering.
This
information
should
not
be
relied
upon
as
the
sole
factor
in
an
investment
making
decision
or
your
decision
to
retire.
In
any
examples
or
case
studies
used,
all
client
names
have
been
changed.
David
Hunter,
CFP®
is
a
CERTIFIED
FINANCIAL
PLANNER™
and
owner
of First
Light
Wealth,
LLC,
a
financial
planning
&
wealth
management
firm
with
a
unique
focus
on
serving
attorneys
nationwide.
David
has
over
a
decade
of
experience
helping
clients
build
financial
plans
and
has
been
featured
in
publications
such
as
Attorney
at
Work,
ThinkAdvisor,
MarketWatch,
Financial
Planning,
and
InvestmentNews.
David
also
writes
weekly
to
attorneys
in
his
popular Money
Meets
Law newsletter.
For
more
about
David,
visit firstlightwealth.com/lawyers or
connect
with
him
on LinkedIn.