10 Year-End Tax Moves Every High Earner Should Make
Smart Year-End Moves to Cut Taxes and Strengthen Your Wealth
The end of the year isn’t just holiday prep and planning for January. It’s your last window to make financial and tax decisions that directly affect your 2025 tax bill and your long-term wealth. When you’re a high earner or managing significant assets, timing matters — and missing a deadline can mean missed deductions, higher taxes, or rushed planning that creates avoidable mistakes.
Below is a clear rundown of the 10 Year-End Tax Moves Every High Earner Should Make before December 31, 2025, plus the early January 2026 tax deadline you don’t want to ignore.
1. Max Out Workplace Retirement Plans for 2025
Your 401(k), 403(b), or similar employer-sponsored plan must receive 2025 contributions by December 31. Payroll must process these contributions before year-end.
Why this matters:
Contributions reduce taxable income now.
The 2025 employee contribution limit is $23,500.
If you’re 50+, you can add a $7,500 catch-up.
Once the year closes, you cannot retroactively contribute.
Tip: If your employer offers profit-sharing or after-tax contributions (like the Mega Backdoor Roth), confirm deadlines early with HR.
2. Set your 401k deferrals to Max Out Workplace Retirement Plans for 2026
Why this matters:
Contributions reduce taxable income now.
The 2026 employee contribution limit is $24,500.
If you’re 50+, you can add a $8,000 catch-up.
Extra special super catch-up for those ages 60 – 63 = $11,250. Note that for high-earners with wages over $150k, those contributions are made via ROTH, or after- tax contributions.
Once the year closes, you cannot retroactively contribute.
Tip: If your employer offers profit-sharing or after-tax contributions (like the Mega Backdoor Roth), confirm deadlines early with HR.
3. Roth Conversion Deadline — December 31
A Roth conversion lets you move pre-tax IRA or 401(k) money into a Roth IRA. There is no limit on how much you can convert, but the conversion must be completed by December 31 to be included in your 2025 taxes. There is also no income limits – everyone can consider a ROTH conversion. We work closely with our clients as we plan out various tax scenarios to see if this makes sense.
Key points:
The converted amount is taxed as ordinary income.
Conversions can reduce future RMDs.
High earners should run tax projections to avoid bumping into a higher tax bracket. We can help with this!
Example: If you're in the 24% bracket and have room before hitting 32%, converting just enough to “fill the bracket” can be a smart long-term play.
4. Fund 529 College Savings Accounts
Most states require 529 contributions to be made by December 31 to qualify for a state income tax deduction or credit. A few exceptions — like Oregon — allow contributions through April 15, 2026.
Key notes:
There is no federal deduction for 529 contributions.
Contributions count as gifts under the $19,000 per-beneficiary exclusion for 2025.
Many high-income families use year-end funding as part of a long-term education and estate strategy.
5. Complete Charitable Giving & QCDs
To claim deductions for charitable giving in 2025, contributions must be completed by December 31.
This includes:
Cash gifts
Gifts of appreciated stock
Qualified Charitable Distributions (QCDs) from IRAs
QCDs must clear your IRA account by December 31 to count for the year. These allow IRA owners 70½+ to donate up to $100,000 directly to charity without recognizing taxable income.
High-earner tip: If you want a large deduction this year but aren’t ready to choose charities, a DAF lets you get the deduction now and give later. See my previous blog on this topic.
6. Required Minimum Distributions (RMDs)
If you are 73 or older in 2025, you must take your RMD by December 31 unless this is your first RMD year.
Rules:
If 2025 is your first RMD year, you may delay until April 1, 2026.
BUT delaying means taking two RMDs in 2026, which may push you into a higher tax bracket.
Certain inherited IRAs also have RMD requirements.
Missing an RMD can trigger a penalty of up to 25% of the amount you should have withdrawn.
7. Tax-Loss Harvesting
December 31 is the last day to harvest losses in taxable investment accounts to offset capital gains for the year.
Benefits:
Offsets realized capital gains
Allows deduction of up to $3,000 of net losses against ordinary income
Lets you carry losses forward indefinitely
Avoid wash-sale rules: Don’t repurchase the same (or “substantially identical”) investment within 30 days.
8. Tax-Gain Harvesting
If you’re in a lower income year, it may make sense to consider tax GAIN harvesting. This means we sell a position to recognize the gain (and pay taxes on it) but rebuy the position again, re-setting the gain clock.
9. Annual Gifting (Estate Tax Strategy)
The 2025 annual gift tax exclusion is $19,000 per recipient ($38,000 for married couples).
You must make gifts before December 31 for them to count in 2025.
Additional notes:
The exclusion resets January 1.
Gifts above the exclusion use your lifetime estate exemption.
The lifetime exemption is $13.99 million in 2025 and rises to $15 million in 2026.
High-net-worth families often use year-end gifting to shift assets efficiently and reduce future estate taxes.
10. JANUARY 15, 2026: DON’T MISS THIS DEADLINE
Fourth-Quarter Estimated Tax Payment
If you’re self-employed or receive income without withholding (like RSUs, bonuses, K-1s, rental income, or capital gains), your Q4 estimated tax payment for 2025 is due January 15, 2026.
Checklist:
Review total 2025 income
Calculate remaining tax liability
Make the January payment to avoid penalties
High-income households with volatile income often need this final payment to stay penalty-free.
FINAL TAKEAWAY
December isn’t just a month — it’s a deadline. The moves you make before year-end shape your tax return, cash flow, and your long-term wealth plan. When you coordinate retirement contributions, Roth conversions, charitable giving, portfolio adjustments, and gifting with your CPA and financial advisor, you’re not just reducing taxes — you’re laying the groundwork for stronger financial outcomes in 2026 and beyond.
There’s still time to act. Just don’t wait until the last week of December when custodians slow down and processing delays can work against you.
Please note, this is not intended for specific advice. Always consult with your tax professionals.
📲 Call to Action:
✨ Schedule your Tax & Wealth Strategy Session
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