Tax-saving Moves to Consider Before Year End

As the year comes to a close, it may be a good time to check on your investments with an eye toward tax implications. Keeping long-term investment goals in mind, we can help you consider adjustments that could impact your typical year-end planning.

Manage Your Income and Deductions

If you’re at or near the next tax rate threshold, pay close attention to anything that might tip some of your earnings into the next range and consider ways to reduce your taxable income before the end of the year. Determine whether it makes sense to accelerate deductions

or defer income to minimize your current tax liability. Certain retirement plans also can help you defer taxes. Contributions to a traditional 401(k) are made with pre-tax dollars, which lowers your income by the amount of the annual contribution.

Contributions to a health savings account (HSA) can reduce taxes too. Your pre-tax payroll deductions reduce income, and any after-tax contributions can be deducted on your tax return, even if you don’t itemize. Remember, your HSA funds can be withdrawn tax-free for qualified medical expenses and never expire.

Mind Your RMDs

Investors who reach a certain age are required to take RMDs from their IRAs. You face a 25% tax penalty on amounts not withdrawn from your IRA to meet the RMD, so you’ll want to confirm you’ve met your obligations.

Taking a distribution will impact your taxable income or tax bracket. If you are in a lower tax bracket, consider taking an additional strategic distribution at that lower rate.

Evaluate Changes

From welcoming a new family member to moving to a new state, these life changes can impact your financial situation. Bring us up to speed on major life changes and ask how they could affect your year-end planning.

Additionally, legislation passed this year under the One Big Beautiful Bill Act introduces several new deductions in 2026. Consult your tax professional to determine if they are available for you and if there’s anything you can do in preparation to take advantage of the changes.

With the new year on the horizon, now’s the time to consider your options and make any appropriate moves.

---

*Withdrawals from qualified accounts, such as an IRA, prior to age 59 1/2 may also be subject to a 10% federal penalty tax. RMDs are generally subject to federal income tax and may be subject to state taxes. Consult your tax advisor to assess your situation. Berry Wealth Group does not provide tax or legal services. Please discuss these matters with the appropriate professional.