2025 Year-End Tax Tips

               Make the Most of 2025: One-Time Opportunities & Smart Moves

As the year draws to a close, take advantage of unique tax planning opportunities and prepare for upcoming changes. 2025 brings several one-time benefits and new rules that can help you save money and avoid surprises. Whether you’re an individual, business owner, or managing an estate or trust, these tips will help you finish the year strong and set yourself up for success in 2026.

For Individuals

• IRS Payments: All federal tax payments must be made electronically. Set up EFTPS or use IRS Direct Pay.
• Bunching Itemized Deductions: Maximize deductions this year.
• State and Local Taxes (SALT): Deduction cap increased to $40,000 for 2025 only. Consider prepaying state income or real estate taxes before December 31.
• Charitable Contributions: Accelerate or ‘bunch’ giving. In 2026, only the portion exceeding 0.5% of AGI is deductible. Consider donor-advised funds.
• Retirement Contributions: Consider IRA or Roth IRA contributions; backdoor IRA may be an option.
• Donating Appreciated Stock: Donate directly to charities to avoid capital gains tax.
• Required Minimum Distributions (RMDs): Qualified charitable distributions can satisfy RMDs—check with your advisor.
• Roth Conversions: Consider converting pre-tax retirement investments if in a lower tax bracket.
• Tax-Loss Harvesting: Offset capital gains by selling investments at a loss.
• Review Mutual Fund Distributions: Avoid buying funds just before taxable distributions.
• Education Credits & 529 Plans: Make contributions before year-end.
• Review Withholding & Estimated Payments: Avoid underpayment penalties.

For Businesses

• Oregon PTE-E Tax Credit Program: Make 4th quarter estimated payments in December to capture the expense.
• Bonus Depreciation: 100% deduction for qualifying assets placed in service in 2025.
• Section 179 Expensing: Favorable limits for small businesses.
• Plan for 2026 Business Meal Changes: Meals for employer convenience and cafeterias not deductible after 2025; client/travel meals remain 50% deductible; company-wide events remain fully deductible.

For Estates & Trusts

• New Electronic Payment Mandate: IRS is phasing out paper checks—set up EFTPS for payments and refunds.
• Annual Gift Exclusion: $19,000 per recipient for 2025.
• Complete Gifts by December 31 to count for 2025.

Final Reminders

• Act Early: Many opportunities expire at year-end; some rules change for 2026.
• Keep Records: Especially for business meals and charitable contributions.
• Review: Mutual fund distributions, retirement account activity, and FSA balances.
• Questions? Reach out to our team for personalized advice.