5 Tax Moves to Do before Dec 31

If you want to pay less tax this year and strengthen your retirement plan, you picked the right video five Moves, All Doable before the End of the Year let's jump in. You still have time to save money on your taxes this year, even if it feels like December has already slipped away from you. It hasn't. The window may be smaller, but it is still open. And the moves you make right now can lower your tax bill and and strengthen your retirement plan before 2026 even begins. Hi everyone, Mike Pappas here, a certified financial planner professional and head of support at boldit. If you are looking for year end tax tips, retirement tax strategies, or just want to keep more of your money, you are in the right place. Today we are walking through five smart year end tax moves that can make a real difference for your finances. Number one is something you can update through your payroll site in minutes. Number two might require a quick stop at Walgreens or cvs. And number five not only helps with taxes, it also lets you support the people and causes you care about most. And by the way, these are the same types of moves financial planners look at every December with their clients. They really do move the needle. So stay with me until the end. These final weeks of the year can still be incredibly valuable. Let's start with a move that is both easy and powerful. If you are still working, you probably have one or two paychecks left this year, and that means you still have time to reduce your 2025 taxable income. For 2025, the contribution limit for workplace retirement plans like 401 s, 403 s, 457 plans and thrift savings plans is $23,500. If you're age 50 or older, you can add a $7,500 catch up contribution, which brings your total possible employee contribution to $31,000 for the year. Also new in 2025 is a special super catch up contribution from the Secured 2.0 Act. If you are age 60, 61, 62 or 63 during the 2025 tax year and your employer's plan offers this feature, you may be eligible for an enhanced catch up of up to $11,250 instead of the standard $7,500 catch up. That means someone who qualifies could contribute up to $34,750 in employee deferrals in 2025, even if you are not aiming for the maximum. A small change now, like increasing your retirement plan contribution 1 or 2%, can lead to a meaningful significant difference later. Let me show you what this looks like in the Bolden plan. In this sample plan, Dave and Diana are both 50 years old. They are each contributing 8% to their 401k plans at work. As we see here under the Accounts and Assets section, their current retirement chance of success is 78% on their baseline plan. If we go to the Insights Savings Savings Balances chart and check the end of 2040 after they are both officially retired, their projected end of year savings are $2,111,355. They also created an additional scenario to analyze the impact of increasing their 401k contributions over time. In this alternate plan, both Dave and Diana increase their 401k contributions by 2% each year until they reach a 15% contribution rate. With this adjustment, their retirement chance of Success rises to 83%. And if we go back to Insights Savings, the savings balances chart at the end of 2040 their projected savings increased to $2,306,355, which is $195,000 more than their baseline plan projected savings at the end of 2040. It's a relatively small gradual increase in their contributions over time, but once you see the impact visually it feels much bigger. Next, it is important to do a quick audit of your health related investment accounts including any Health SA account or HSA and Flexible Spending Account or FSA. These accounts can offer valuable tax advantages. HSAs offer three major tax benefits. Your contributions reduce your taxable income, the money can grow tax free and withdrawals for qualified medical expenses are tax free. It is one of the few accounts that gives you all three benefits. For 2025 the contribution limits are $4,300 for self only coverage, $8,550 for family coverage, and if you are 55 or older you can contribute an additional $1,000. You can contribute to an HSA regardless of your income as long as you are HSA eligible. That usually means you are enrolled in a qualifying high deductible health plan, are not enrolled in Medicare, are not claimed as a dependent on someone else's tax return, and do not have other disqualifying health coverage. Even though HSA contributions can be made up until the tax filing deadline, getting it done before year end helps your money start working sooner. This matters even more if you invest your HSA funds and because every extra month of tax free growth can help. If you cannot adjust your payroll contributions because your employer has already locked changes for the year, you can generally still make additional HSA contributions directly from your checking account and receive the tax deduction when you file your tax return. Just make sure the total contributions between payroll, employer funding and anything you add on your own do not exceed the annual limit for self only or family coverage. Flexible spending accounts or FSAs operate differently and require a separate year end check. Many FSA funds must be used by December 31, although some employers offer a small rollover or a short grace period. So check with your employer and yes, this is the one move in the video where procrastination can actually cost you money. So check your balance and enjoy a little year end shopping before those dollars disappear. A short review of your FSA balance can prevent losing money you already earned tax free. Let's now shift to your taxable investments. This next move can feel pretty technical, but I promise it's easier than it sounds Once you see the basic idea, this can be a great time to review your taxable brokerage accounts and decide whether it makes sense to consider tax loss harvesting or tax gain harvesting. Think of this as tidying up your investments before the end of the year and potentially saving money on taxes in the process. First, losses. If an investment is currently worth less than what you paid for it, that's called a capital loss. Selling that investment lets you use the loss in a few helpful ways. It can offset capital gains from investments you sold at a profit in 2025. If your losses are larger than your gains, up to $3,000 can reduce your ordinary income for the year, and any leftover losses can carry forward to future years. One important rule to be aware of with tax loss harvesting is the wash sale rule. This says that if you sell an investment at a loss and then buy the same or a substantially identical investment within 30 days before or after the IRS will disallow the loss. The easiest way to avoid it is to wait more than 30 days before repurchasing the same investment or choose a different fund that is similar but not identical. Meanwhile, tax gain harvesting involves selling an appreciated asset held for more than a year to qualify for long term treatment and then immediately buying the same investment back. This strategy is most beneficial when your taxable income falls within the 0% long term capital gains tax bracket. If you sell, you can then repurchase your positions, which resets the cost basis and minimizes the amount of tax to be paid on future gains. Even if you're not in one of the lowest tax brackets, you may still consider selling winning investments to reset the basis if you're also harvesting losses this year. Although These harvesting moves may sound complicated at first. It often comes down to reviewing a short list of holdings and making one or two intentional decisions. Next, let's look at one of the most powerful year end tax planning opportunities. That's a popular one with our golden users. A Roth Conversion A Roth conversion allows you to move money from a pre tax retirement account to a Roth retirement account. Conversions must be completed by December 31st to count for this year. Here's why this move can be so valuable. When you convert, you pay taxes on the amount you move today and all future growth withdrawals in retirement can be completely tax free. You are essentially choosing to pay tax now so your future self may avoid paying tax later, especially in years when your tax rate could be higher. Converting can also reduce your future required minimum distributions or RMDs, which lowers your taxable income in retirement and can keep more of your money in the Roth where it continues growing tax free. The best time to consider a conversion is usually a lower income year before RMDs begin or before Social Security benefits fully ramp up. For many people, the years between retirement and claiming Social Security provides the largest opportunity. Bolden helps you see whether a Roth conversion is beneficial for your plan. Here we are back in Dave and Diana's plan. If we go to Insights Taxes and scroll down to the Net Taxable Income by Federal tax bracket chart, we can see there's a small roughly five year window after they retire where they fall into the lowest tax bracket. That kind of window is often a great opportunity to explore Roth conversions. Next, if we go to Explorers Roth Conversion Explorer, you can test four different Roth conversion strategies in the Bold and Planner. Many of our users choose the tax bracket limit strategy since it lets you see the impact of converting within a specific tax bracket. Dave and Diana are still several years away from retirement, but they wanted to understand the potential of conversions in the 12% bracket. So that's the strategy they explored first. After running the Explorer. And based on their current assumptions, completing four Roth conversions in the 12% tax bracket during that post retirement window could potentially increase their projected estate value by more than $230,000 and reduce their lifetime taxes by approximately $58,000. As you can see, this can be a powerful strategy if Roth conversions have been on your mind. Consider this your reminder to run the numbers this week because conversions must be completed by December 31st for the current tax year. For the final move, let's Smarter Charitable Giving because this is where tax planning and your values can work together. If you already plan to give this year, there are ways to make your generosity go further both for you and the organizations you support. Here are three simple strategies that can increase the tax benefit of your giving. Donating Appreciated securities if you have investments that have grown in value, donating shares you've held for a year or more can be one of the most tax efficient ways to give. Donating the shares directly instead of selling them can help you avoid capital gains tax altogether. The charity receives the full value and you may receive a deduction for the fair market value of the asset. Bunching several years of giving into one tax year. If your itemized deductions are close to the standard deduction, grouping multiple years of charitable giving into a single year can push you over the threshold and allow you to itemize in that year, which increases your tax benefit. Many people use a donor advised fund to accomplish this. You get the full deduction in the year you fund the donor advised fund and you can distribute the money to charities over time. Use a Qualified charitable distribution or QCD. If you're age 70 and a half or older. A QCD lets you send money directly from your IRA to a qualified charity and the amount is excluded from your taxable income. This can help reduce Medicare premiums, avoid a higher tax bracket, and potentially lower the taxes you pay on Social Security benefits. QCDs must come from an Iraq, not a workplace retirement plan like a 401K. For 2025, you can donate up to $108,000 through QCDS. Thanks to the inflation index limit for married couples, each spouse can use their own $108,000 limit as long as the QCD comes from their individual ira. And once you reach the age for required minimum distributions or RMDs, QCDs can count towards your RMD for the year. Each of these strategies needs to be completed by December 31st. To take advantage of the tax benefits for this year, look out for Bolden advisor Bruce Lorenz's video in the coming weeks where he will walk through real examples and help you see which approach may fit your situation to wrap up. These five year end moves are some of the most effective ways to lower your taxes, strengthen your financial foundation and start 2026 with confidence. And you do not need to do all five. Even taking action on one or two of them can set you up for a stronger year ahead. Year end planning is not just about this year's tax return. It is about giving your future self more clarity, more control and a more stable financial path forward. These small choices add up in a big way if you found this helpful. Subscribe for more videos on retirement planning, taxes and making the most of the Bolden Planner. And if you want to see how these moves affect your personal plan, try the Bolden Planner for free. It is one of the most effective ways to understand your financial future with confidence. Thanks for joining me today. Wishing you a strong finish to the year and happy planning.