Gear Up For Year-End Tax Planning

Article by: Jeff Chase

Sr. VP, Financial Planning & Sr. Wealth Manager

It’s about that time of year! As summer fades and autumn approaches, our team will begin focusing on year-end tax planning. We firmly believe this type of planning is crucial as part of a well-rounded approach to financial planning and one that can yield significant benefits as taxes permeate every aspect of our financial lives. As with all aspects of financial planning, our goal for tax planning is to help lay the groundwork for long-term success.   

Among the various strategies we consider, Roth conversions are particularly impactful for many people. A Roth conversion involves transferring all or part of a Traditional IRA balance into a Roth IRA. Depending on your individual situation, this strategy can be advantageous in reducing the amount of money you will pay in lifetime taxes.   

As it pertains to evaluating whether a Roth conversion will be beneficial, there are many factors to consider, but we wanted to highlight Federal tax brackets in this newsletter. At the end of 2025, Federal tax brackets are set to revert to the levels from before the Tax Cuts and Jobs Act was passed in 2017. This means the tax brackets will be less advantageous for all of us as taxpayers, making this year and next year critical years to ensure that Roth conversions are implemented to take advantage of the current brackets.  

While Roth conversions are particularly impactful, this is just one facet of a broader spectrum of tax planning strategies that should be considered as the year ends. Simple actions like maximizing contributions to retirement plans can play a significant role in optimizing things from a tax perspective, along with more complex strategies such as appropriately adjusting income tax withholdings or determining how to gift assets to family members and charitable organizations in the most tax-efficient manner.  

As our team prepares for these important conversations, you will see these topics on upcoming meeting agendas to make sure we capitalize on available opportunities. As with every aspect of financial planning, we are committed to making sure you and your family are well-equipped for sustained success in the years ahead!