As my colleague, Jonathan Henry, wrote in July, the One Big Beautiful Bill Act (“BBB”) introduces several new tax provisions that take effect next year, in addition to permanently extending some of the tax law changes we saw in 2017 with the Tax Cuts and Jobs Act.
For investors and families, there are quite a few opportunities to generate savings and take advantage of key provisions in the BBB. Jonathan detailed many of these provisions in his article.
But what I’d like to do here is to keep it simple, focusing specifically on what readers can do before year-end. Here are five ideas/strategies to consider.
Put Losses to Work: Tax-Loss Harvesting
Equity markets have performed well in 2025, but many of the gains have been concentrated in a few big names. The rising tide did not necessarily lift all boats.
Now that the end of the year is weeks away, it’s time to take a closer look at those parts of your portfolio that may have lagged this year, and potentially harvest losses to offset realized gains you’ve taken in 2025.
If harvested losses exceed realized gains for the year, you can deduct up to $3,000 (the deduction is $1,500 for married couples filing separately) of those losses against your ordinary income for the year, with any leftover balance carrying forward indefinitely.
Quick Checklist:
- Identify positions with losses and consider harvesting the losses.
- Remember to avoid wash sales. If you sell a security, you cannot replace it with a “substantially identical” security for 30 days.
- Work with your advisor to track cost basis/holding periods so you can execute trades efficiently.
Think Strategically When Taking Advantage of the Expanded SALT Deduction
The BBB raises the state and local tax (SALT) deduction to $40,000 for most filers for tax years 2025 to 2029 (scheduled to revert to $10,000 in 2030). In some cases, prepaying eligible state income and other local taxes before year-end can improve your deduction, so this is something to keep front of your mind between now and the end of the year.
It’s not always the case that prepaying creates additional savings, however. The alternative minimum tax and overlapping phaseouts can factor into the decision-making process, so it’s important to talk to your CPA about the best approach.
Quick Checklist:
- Gather your year-to-date withholding amounts and your projected state and local tax liabilities.
- Use these figures to model outcomes of paying in 2025 versus waiting until January (AMT and phaseouts will factor in here).
- Determine with your advisors if paying in 2025 produces net savings.
Optimize Charitable Giving
Knowing how to give is equally important as the ‘how much’ question, and it generally depends on your income, whether you’ll itemize this year and your cash-flow needs.
Cash gifts are straightforward to execute near deadlines. Families who are itemizing sometimes consider cash for simplicity, while confirming with a tax professional how limits factor into each situation. Gifting appreciated securities is another approach to explore, and some families also consider “bunching” several years of gifts—often via a donor-advised fund (DAF)—to concentrate the deduction in a single tax year and grant over time.
If reducing adjusted gross income (AGI) is the priority for you this year—and you’re over the age of 70 ½ —Qualified Charitable Distributions (QCDs) could be a good option. A QCD allows an IRA owner to direct a gift from the IRA to an eligible charity, and when done correctly, it can be excluded from AGI and can count toward the year’s RMD. Because eligibility, limits and mechanics (e.g., custodian-to-charity transfers and acknowledgment letters) are specific, coordination with your advisor and a tax professional is important.
Finally, BBB’s 2026 rules (an above-the-line charitable allowance for non-itemizers and a 0.5%-of-AGI floor for itemizers) don’t change 2025 filings. But they are worth noting as you consider the timing of larger, multi-year gifts.
Quick Checklist:
- Compare methods with your CPA: cash, appreciated securities/DAF or (if 70½+) QCD, based on whether you’ll itemize and whether AGI reduction matters for you this year.
- Consider a multi-year strategy. If 2025 included a Roth conversion or another income event, discuss whether accelerating charitable gifts planned for future years could enable you to take advantage of a larger deduction this year.
- Be mindful of timing and initiate transfers and gifts well before December 31.
Maximize Annual Exclusion Gifts
In 2025, the annual exclusion for gifts is $19,000 per recipient. This is the amount any individual can gift to another individual without the gift counting towards their lifetime exemption. It’s an easy way to move wealth out of your estate and to support family goals at the same time.
For the greatest impact, it’s a smart idea to aim gifts where they can compound over time. Think Crummey Trusts, 529 plans (which you can front-load when appropriate), a Roth IRA for a young earner with W-2 income or transferring interests in a closely held business if valuation and governance allow.
On a separate but related note, the BBB raises the estate and gift tax exemption to $15 million per person (indexed going forward), creating a window for larger trust funding where suitable.
Quick Checklist:
- Allocate your 2025 annual exclusion ($19,000 per recipient) using assets that compound over time. If a child has earned income, consider funding a Roth IRA (within limits).
- Discuss goals with your advisor/CPA and complete gifts prior to December 31 so they count for 2025.
Maximize Retirement and HSA Savings
For those still contributing to retirement plans, a step you can take before year-end is to verify your deferral rate against 2025’s contribution limits, and make payroll changes if there’s an opportunity to do so. Remember to include age-based catch-ups if eligible.
If you’re on a qualifying high-deductible health plan (HDHP), remember to fund your HSA for the triple tax benefit (tax-deductible contributions, tax-free growth and tax-free withdrawals when funds are used for qualified medical expenses). Many families let HSAs compound by paying current costs out-of-pocket and saving receipts for possible reimbursement later—generally an advantageous strategy.
Looking ahead to next year, high earners need to be aware that effective January 1, 2026, employees with prior-year Social Security wages greater than $145,000 (indexed annually for inflation) must make catch-up contributions as after-tax (Roth) contributions, which is only possible if your plan offers a Roth option. This was a key change in the BBB.
Quick Checklist:
- Try to maximize 401(k)/403(b)/IRA contributions (plus catch-up).
- Max your HSA (and the 55+ catch-up if applicable).
- Prepare for next year’s changes, especially if you’re a high earner. If you’ll exceed $145,000 in income this year, confirm your plan supports Roth catch-ups and adjust elections with HR/CPA.
Conclusion
Year-end planning works best when investments, taxes and estate moves are coordinated and documented. For 2025, focus on actions you can take before the end of the year, like harvesting losses judiciously, modeling SALT timing, aligning charitable giving with how you’ll file, making annual gifts and topping off retirement/HSA elections.
Keep an eye on BBB changes that start in 2026 (e.g., charitable deduction changes and Roth-only catch-ups for certain high earners) as you decide what to accelerate into this year. Most importantly, review each step with your advisor, CPA and attorney so your plan reflects your family’s goals and your tax posture.
For more information, please reach out to:
WALKER DOUGLAS, CFP®, J.D.
Wealth Advisor, Principal
wdouglas@trustcompanyofthesouth.com
DISCLOSURES
This communication is for informational purposes only and should not be used for any other purpose,
as it does not constitute a recommendation or solicitation of the purchase or sale of any security or
of any investment services. Some information referenced in this memo is generated by independent,
third parties that are believed but not guaranteed to be reliable. Opinions expressed herein are subject
to change without notice. These materials are not intended to be tax or legal advice, and readers are
encouraged to consult with their own legal, tax, and investment advisors before implementing any
financial strategy.
