Year-End Tax Planning Strategies for High-Net-Worth Individuals: Maximizing Opportunities Before 2026

A Year-End Financial Checkup

As 2025 draws to a close, it’s the perfect time to pause, reflect, and take inventory of your financial progress. Start by reviewing the goals you set at the beginning of the year. Which milestones did you achieve? Take a moment to celebrate those wins – each represents meaningful progress toward your long-term wealth and life goals.

Next, look at the goals that are still in progress. Are you on track to complete them before year-end? Would a course correction – such as rebalancing investments, adjusting tax strategies, or reviewing cash flow – help you finish strong? These conversations are best had in partnership with your financial planner, who can help you prioritize high-impact actions before December 31.

The final quarter of the year is an ideal time to make intentional financial moves that can significantly reduce your tax liability, align your portfolio with your broader wealth goals, and set the stage for a stronger year ahead.

Why 2025 Is a Pivotal Year for Tax Planning

The One Big Beautiful Bill Act (OBBBA) that was passed in July 2025 introduced meaningful changes, and understanding how these impact high-net-worth taxpayers is essential for strategic year-end tax planning.

SALT Deduction Cap Increases in 2025

The State and Local Tax (SALT) deduction cap was increased from $10,000 to $40,000, rising by 1% each year through 2029. However, the expanded deduction phases out once modified adjusted gross income (MAGI) exceeds $500,000, returning the maximum deduction to $10,000.

This change means that high-income households just under that threshold may benefit from a larger deduction – at least temporarily. If you anticipate being close to the phase-out limit, your financial planner can help determine whether strategies such as deferring income or accelerating deductions might help you optimize the SALT benefit before the window closes.

Charitable Deduction Adjustments

Charitable giving remains a core element of year-end tax planning, but the OBBBA imposes new limits beginning in 2026. Under the new rules:

• Taxpayers who itemize will forgo an amount equal to 0.5% of adjusted gross income (AGI) when calculating charitable deductions.
• For example, a taxpayer with $400,000 in AGI will lose the deduction on the first $2,000 of donations.
• Additionally, those in the top tax bracket will only be able to deduct at a 35% rate, down from 37%.

For high-income individuals, this makes 2025 a crucial year to accelerate charitable giving. One effective strategy is to fund a Donor-Advised Fund (DAF) before year-end, which allows you to take a full deduction for 2025 and distribute gifts to charities over time. Another technique is “bunching” charitable contributions – making several years’ worth of gifts in one tax year to maximize your itemized deduction before the new limitations apply.

Year-End Strategies for Tax-Efficient Giving

For those holding long-term appreciated investments, donating these securities can deliver a double benefit:

1. You receive a charitable deduction based on the investment’s fair market value, and
2. You avoid paying capital gains tax on the appreciation.

If you’ve owned the asset for more than one year, this strategy can meaningfully enhance the tax impact of your giving while aligning with your philanthropic goals. Remember that your deduction is limited to 30% of AGI for long-term capital gain property, but any excess can be carried forward for up to five years.

Maximize Tax-Deferred Opportunities

If you’re still in your working years, make sure you’re taking full advantage of retirement and health-related savings accounts before year-end.

• 401(k) Contributions: The 2025 elective deferral limit is $23,500, and if you’re age 50 or older, you can also make an additional “catch-up” contribution of $7,500. And be sure to see if your employer sponsors a “super catch-up” contribution, which allows an additional $11,250 on top of the standard catch-up for those aged 60 to 63.
• Health Savings Accounts (HSAs): If you’re enrolled in a high-deductible health plan (HDHP), an HSA provides triple tax benefits – contributions are deductible, growth is tax-free, and qualified withdrawals are also tax-free.

Review your open enrollment options, adjust payroll deductions as needed, and consider increasing contributions before December 31 to capture the full tax benefit for the year.

Qualified Charitable Distributions

For those age 70½ or older, Qualified Charitable Distributions (QCDs) from an IRA can satisfy part or all your Required Minimum Distribution (RMD) while excluding that amount from taxable income. It’s a tax-efficient way to give back while managing the impact of RMDs on your overall income.

Roth Conversions

Converting a portion of traditional IRA assets to a Roth IRA may make sense now – especially if you expect to be in a higher tax bracket later.

Tax-Loss Harvesting

If your taxable accounts have underperforming investments, harvesting capital losses can offset gains and reduce your overall tax bill. Just remember the wash-sale rule, which prohibits repurchasing a substantially identical security within 30 days.

Final Thoughts: Make 2025 a Year of Action

Year-end tax planning isn’t just about saving money – it’s about proactively managing wealth in a changing legislative landscape. High-net-worth families who act early and plan strategically can minimize future tax exposure, preserve more wealth for future generations, and continue supporting the causes they care about most.

Before the end of 2025, review your income, deductions, charitable giving, and investment strategies with your financial advisor. This is a rare window where timing, coordination, and execution can lead to lasting benefits.

Coordinating with your fiduciary financial advisor / wealth manager, CPA, and estate attorney ensures your strategy remains aligned with your broader goals. For high-net-worth individuals, integration across tax, investment, and estate planning is key – especially as legislative changes continue to evolve.

This article was originally published here and is republished on Wealthtender with permission.

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