With the end of the year fast approaching, a little year-end housekeeping could help lower your taxable income, maximize your charitable deductions, and reduce exposure to future taxes.

Lowering your taxable income

The end of the year is a great time to take stock of what opportunities are available to you and how you can use them to your advantage. Here are some ways you might be able to hang on to more of your hard-earned money:

• Tax-loss harvesting. Investment losses can be used to offset any gains you've realized in 2025, or up to $3,000 of income. Consider selling depreciated securities that no longer fit your strategy, have poor prospects for future growth, or can be replaced with similar investments that play a similar role in your portfolio.
• Contributing to tax-advantaged accounts. Contributions to a 401(k), 403(b), or a health savings account¹ could potentially lower your taxable income for this year and increase the assets you have available for future retirement and medical expenses. It's good practice to review your contributions before year-end to ensure you're taking full advantage of the limits for these accounts.

Maximizing your charitable deductions

If you're like me, your mailbox is probably filling up with letters from the charities you support asking for additional end-of-year contributions. Giving is inherently rewarding, but you may also want to consider ways to give tax-efficiently. Here are some tax-efficient giving strategies based on current law:

• Bunching charitable contributions. It may be wise to make multiple years' worth of charitable contributions this year so you can itemize deductions versus splitting them over multiple years and taking the standard deduction each year. Bunching charitable contributions in 2025 also maximizes their value by avoiding a new 35% cap on the value of itemized deductions and 0.5% adjusted gross income (AGI) floor on charitable contributions for taxpayers who itemize, both effective in 2026. For those who itemize, especially large donors in the 37% marginal tax bracket, charitable contributions made in 2025 will be worth more than charitable contributions made in 2026.
• Donating appreciated assets. If you are itemizing deductions, and you donate an asset held for longer than one year to a qualified public charity, you may be able to deduct the fair market value of the asset without paying capital gains on a sale, subject to a 30% adjusted gross income (AGI) limitation.
• Making cash contributions. If you are itemizing deductions, remember that up to 60% of your AGI can be deducted for cash contributions made to qualified charities in 2025.

Reducing exposure to future taxes

Year-end planning isn't just about the here and now. There are several things you can do before the end of this year that could help reduce the impact of future taxes and provide added benefit to your beneficiaries or favorite causes:

• This year's lifetime estate and gift tax exemption increase. In 2025, the inflation adjustment for the lifetime estate and gift tax exemption was $380,000. For those who had already maxed out their exemption prior to 2025, this offers an additional opportunity to move appreciation of assets out of their estate—as much as $760,000 for a married couple. While this isn't something that has to be done within the calendar year, you should take it into account when making future plans. Also note that because the One Big Beautiful Bill Act ("OBBBA") increases the federal exemption increases to $15 million (indexed for inflation in 2026), there will be continuing opportunities for clients to max out their lifetime exemptions.
• Annual exclusion gifts. In 2025, you can make gifts up to $19,000 to as many beneficiaries as you like, which can help reduce your estate's value without using any of your lifetime gift and estate tax exemption. A married couple can make a combined annual gift up to $38,000 per recipient through "gift splitting."
• Qualified charitable distributions (QCD). If you are age 70½ or older and have an IRA, you may want to consider making direct transfers of up to $108,000 ($216,000 for married couples filing jointly) from your IRA to eligible charities. This could potentially reduce the amount of current or future required minimum distributions. Additionally, a direct transfer does not increase your AGI, meaning it will not adversely affect your itemized deductions, Medicare premiums, or Social Security benefits. Note that a QCD is almost always a better deal than giving cash to charity, though your accountant can run the numbers to confirm this for you.
• IRA or 401(k) distributions. This may be worth considering if you have relatively low income this year, especially if you believe that tax rates will rise in the coming years.

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