Year-End Financial Planning in 2025: Key Changes, Deadlines, and Opportunities

November 14, 2025

Year-end planning is a valuable practice each year. But 2025 isn’t just another year — it brings new contribution limits, fresh tax rules under the One Big Beautiful Bill Act, and unique opportunities that high-net-worth families should know about. By planning proactively, you can make the most of updated rules while positioning yourself for long-term success.

Must Be Completed by December 31, 2025

The end of the calendar year comes with hard deadlines for certain financial actions. Missing these deadlines can result in penalties, missed tax-saving opportunities, and an overall impact on your wealth planning goals. Here’s a breakdown of what you should consider prioritizing before December 31:

  • Required Minimum Distributions (RMDs): If you’re 73 or older, be sure to take your RMD from your retirement accounts, including IRAs and 401(k)s, to avoid the hefty 25% penalty.
  • Roth Conversions: Consider moving funds from a traditional IRA to a Roth IRA, paying taxes now in exchange for tax-free withdrawals later. This can be a valuable planning tool if you expect to be in a higher tax bracket in the future.
  • 529 Plan Contributions: Funds in 529 Plans grow tax-free for future education expenses. Starting in 2026, some K-12 expenses, homeschooling costs, and tutoring costs, will be considered qualified expenses for 529 Plans.
  • Annual Family Gifting: You can give up to $19,000 per person per year without impacting your lifetime gift tax exemption.  This amount can be doubled to the extent you are married.
  • Tax-Loss or Tax-Gain Harvesting: Evaluate with your Freestone Advisor if you can offset capital gains by selling underperforming investments or realize gains in a low-income year.
  • Qualified Charitable Distributions (QCDs): For those aged 70½ and older, a QCD allows you to donate up to $108,000 directly from your IRA to a charity, satisfying RMD requirements while reducing taxable income.
  • Charitable Donations: Beyond QCDs, consider direct charitable contributions or funding a donor-advised fund for potential tax savings. In 2026, there are new rules for deducting charitable contributions due to OBBBA. If you itemize your tax deductions, your charitable contribution may result in more tax savings in 2025 versus 2026.
  • Flexible Spending Account (FSA) Spending: Use any remaining balance in your FSA before year-end, as many plans have a “use it or lose it” rule.

Deadlines Extending Into 2026

While some financial tasks must be completed by December 31, others have more flexibility. Planning ahead ensures you’re on track for a strong start to the new year:

  • IRA and Roth IRA Contributions: Contribute up to $7,000 (plus a $1,000 catch-up if 50+) by April 15, 2026, for the 2025 tax year. Modified Adjusted Income limits do apply.
  • Health Savings Account (HSA) Contributions: Contribute up to $4,300 (individual) or $8,550 (family), with an extra $1,000 catch-up if 55+, by April 15, 2026.
  • SEP & SIMPLE IRA Contributions: Contributions can be made up to your company’s 2025 tax filing deadline, including extensions.
  • Individual 401(k) Contributions: Employee deferrals typically must be made by year-end, but employer contributions can extend to the business tax deadline.

Key Contribution Limits for 2025

Knowing the specific contribution limits for 2025 ensures you’re maximizing retirement and savings opportunities:

  • IRA/Roth IRA: $7,000, plus $1,000 catch-up if age 50+.
  • 401(k)/403(b)/457 Elective Deferrals: $23,500, with a $7,500 catch-up at age 50+. Those ages 60–63 may make an enhanced catch-up of $11,250. If you earned $145,000 or more in FICA (W-2) wages during 2025, then 2026 catch-up contributions can only be made to Roth IRAs. It is important to adjust your contributions and set up a Roth IRA account if needed for the coming year.
  • SIMPLE IRA: $16,500, with a $3,500 catch-up if age 50+. The change to catch-up contributions in 2026 does not apply to self-employed individuals since they are based on FICA wages.
  • Defined Contribution Limit: $70,000 (including employer contributions).
  • Defined Benefit Limit: $280,000 annual benefit.
  • HSA: $4,300 (individual) or $8,550 (family), plus $1,000 catch-up at age 55+.

Tax Considerations for 2025

Your tax strategy can have a significant impact on your overall financial health. Key updates include:

  • Standard Deduction:   
    • $15,750 for single filers
    • $31,500 for married filing jointly
  • IRA Deduction Phase-Outs (active participants):
    • $79,000–$89,000 for single filers
    • $126,000–$146,000 for married filing jointly
  • Roth IRA Contribution Phase-Outs:
    • $150,000–$165,000 for single filers
    • $236,000–$246,000 for married filing jointly
  • One Big Beautiful Bill Act (OBBBA) Provisions:
    • Expiring energy credits: Solar panels, battery storage, and energy-efficient home upgrades must be in service by December 31, 2025.
    • State and Local Tax (SALT) Deduction: Increased to $40,000 for tax years 2025–2029.
    • “Trump Accounts”: Children born between 2025–2028 receive a $1,000 government contribution at birth. While other savings accounts such as 529 Plans and Roth IRAs are the focus for long-term planning, it is worth taking advantage of the free contribution if your child qualifies.
    • Depreciation & Expensing: 100% bonus depreciation has been permanently restored for qualifying property placed into service after January 19, 2025.

Estate and Gift Tax Updates

Estate planning remains a vital consideration for high-net-worth individuals:

  • Annual Gift Exclusion: $19,000 per recipient.
  • Federal Estate & Gift Tax Exemption: $13,990,000 per person, with portability between spouses.
  • Generation-Skipping Transfer (GST) Exemption: $13,990,000 per person (no portability).
  • State Estate Tax Exemption:
    • Washington: $3,000,000 per person (no portability)
    • Oregon: $1,000,000 per person (no portability)

Final Thoughts

2025 offers more planning opportunities, and more complexity, than in years past. From higher contribution limits to new rules under OBBBA, this year’s decisions could have a meaningful long-term impact on your financial plan. By acting before the above-mentioned deadlines and working closely with your advisor, you can take advantage of new strategies while preparing for 2026 and beyond.

Important Disclosures

This article is not intended to provide and you should not rely upon it for accounting, legal, tax or investment advice or recommendations. We are not making any specific recommendations regarding any financial planning, investment or tax strategy, and you should not make any financial planning, investment or tax decisions based on the information in this article. This article is intended to be educational in nature and to discuss a few limited aspects of very complex legislation or other complex subject matters. This article is not a comprehensive or complete summary of considerations regarding its subject matter. Where we obtain information from third-party sources, we believe such sources to be reliable but we do not guarantee their accuracy. We recognize that individual circumstances vary and the opinions expressed in this article may not be appropriate for everyone. Please consult with a Freestone client advisor, accountant, or lawyer regarding options tailored for you. Please note that Freestone does not approve or endorse any third-party content hyperlinked to in this article, if applicable.