As we approach the end of 2025, there's still time to maximize your financial planning. Please reach out to me if you have questions or need help with any of the following:
1. Maximize retirement accounts: The 2025 maximum contribution limits for retirement tax-advantaged accounts are:
- IRA: $7,000 (or $8,000 if you’re 50 or older)
- 401(k): $23,500 (Those 50 and older can contribute an additional $7,500. Those between 60-63 can contribute an additional $11,250)
Deadline:401(k) contributions must be made by Dec. 31, 2025. IRA contributions for the 2025 tax year can be made until April 15, 2026.
2.Back-door Roth: A backdoor Roth is a strategy in which you make post-tax contributions to a new or existing traditional IRA and then convert those funds to a Roth IRA. There are tax rules to consider with this strategy, namely the basis and earnings of all your IRA assets in aggregate may need to be considered when determining the taxable amount. Please consult with a tax professional before using this strategy. 
3. Max-out college 529 plans: You can contribute up to $19,000 in 2025 for single filers ($38,000 if married filing jointly) per beneficiary without triggering the federal gift tax. You can also "superfund" a 529, making up to 5 years' worth of contributions ($95,000 for 2025) all at once to reduce your taxable estate. You can also contribute to a 529 for a grandchild or niece/nephew.
4. Take required minimum distributions: If applicable, be sure to take your 2025 IRA or 401k required minimum distribution. This may apply to any inherited IRAs you have as well. Also, please remind parents and family members to take their RMDs as well, there are penalties if not taken.
5. Roth conversions: You have until the end of this year to complete Roth conversions for the 2025 tax year. Please let me know if you want to review.
6. Charitable deductions and qualified charitable distributions: If you itemize your taxes and charitable giving is a priority, the deadline to make your charitable gift and count for this tax year is December 31, 2025. A qualified charitable distribution (QCD) allows individuals age 70½ or older to donate funds directly from their Individual Retirement Account (IRA) to a qualified charity. The donated amount is excluded from the IRA owner's taxable income and can be used to satisfy all or part of their Required Minimum Distribution (RMD).
7. Tax-loss harvesting: If you experienced an investment loss in 2025, tax-loss harvesting involves selling investments at a loss to offset the taxes owed on capital gains from other investments. Please reach out to me to discuss if tax-loss harvesting makes sense this year.
8. Maximize company plans: Be sure to use up any workplace accounts like a Flexible Spending Account to avoid losing any unspent funds. If eligible, be sure to fully fund your Health Savings Account, though the deadline is April 15, 2026 to have HSA contributions count for 2025.
9. Defer income if it makes sense: If 2025 is a high-income year or you wish to lower your current year tax bill, consider ways to defer income such as utilizing workplace deferred compensation, not exercising stock options, or not taking retirement plan distributions until 2026.
10. Schedule a 2026 financial strategizing meeting: This is probably my favorite to-do :) I look forward to catching up with all my clients in the first quarter to strategize about the new year. Please use my calendar link to schedule your meeting if we haven't done so already: 2026 Planning Call
Happy Holidays!
Michael Aloi, CFP