Before you can make any meaningful progress with your year-end tax planning, you’ll need to have your financial documents organized. Gathering and reviewing your information early can save time and reduce stress later, especially when tax season arrives.

Start by creating a checklist of what you’ll need:

• Income documents: W-2s, 1099s, K-1s, and investment income statements.
• Expense documentation: Receipts for deductible expenses, charitable donations, and unreimbursed moving costs (for military families).
• Investment statements: Year-end summaries showing gains, losses, and dividends.
• Retirement account statements: To confirm contributions, distributions, and balances.
• Real estate records: Closing statements, mortgage interest forms, and property tax payments.
• Small Business and/or Rental Property records: Profit & Loss statements, balance sheets, mortgage documents, insurance, and statements from a property manager.

Organizing now also allows you to identify missing information or discrepancies while there’s still time to correct them. If you work with a tax professional, having your documents ready early helps ensure a more complete and accurate return.

Charitable giving remains one of the most effective ways to reduce your taxable income while supporting causes that matter to you. If you itemize deductions, you can deduct donations to qualified 501(c)(3) organizations, whether in the form of cash or appreciated assets.

Cash Donations

Cash contributions are straightforward; just make sure they’re made before December 31 and that you obtain receipts or acknowledgment letters from the charities. Even small donations can add up over the year.

Donating Appreciated Assets

If you have stocks or mutual funds that have appreciated, donating them directly to charity allows you to avoid paying capital gains tax on the appreciation while still receiving a charitable deduction for the fair market value. This can be an especially tax-efficient way to give.

Donor-Advised Funds

A donor-advised fund (DAF) allows you to make a large charitable contribution in one year, claiming the full deduction, but distribute the funds to charities over time. This can be useful if you expect higher income in the current year or want to bunch deductions for greater tax benefit.

For those who are charitably inclined and over age 70½, a Qualified Charitable Distribution (QCD) can be a smart tax strategy. A QCD allows you to transfer up to $100,000 per year per person directly from your IRA to a qualified charity.

This approach satisfies your RMD (up to the amount given) without increasing your taxable income, since the amount goes directly to the charity rather than passing through your hands. The QCD isn’t counted as a charitable deduction, but its exclusion from income can help reduce the taxation of Social Security benefits and minimize Medicare premium surcharges.

To qualify:

• You must be at least 70½ at the time of the distribution.
• The funds must go directly from the IRA custodian to the charity.
• The charity must be a qualified 501(c)(3) organization.

If you plan to make a QCD, contact your IRA custodian early to ensure the transaction is processed before December 31.

If you have taxable investments that have lost value this year, you can use tax loss harvesting to your advantage. This involves selling investments at a loss to offset capital gains elsewhere in your portfolio.

How It Works:

• Offset gains: Realized losses can offset realized gains, dollar for dollar.
• Offset ordinary income: If your losses exceed your gains, you can deduct up to $3,000 ($1,500 if married filing separately) against ordinary income.
• Carry forward: Any unused losses can be carried forward to future years.

Important Considerations

Be careful to avoid the wash-sale rule, which disallows a loss if you repurchase the same or “substantially identical” investment within 30 days before or after the sale. To maintain your portfolio’s allocation, consider replacing the sold asset with something similar but not identical. For example, selling one S&P 500 fund and buying another that tracks a different index.

Tax loss harvesting can be particularly valuable in volatile markets and can complement long-term investment strategies.

The annual gift tax exclusion allows you to give up to $19,000 per recipient in 2025 without triggering gift tax or using any of your lifetime estate and gift tax exemption. If you’re married, you and your spouse can each gift $19,000 per person—for a combined $38,000.

Gifts can take many forms:

• Cash or checks
• Appreciated stock (better as a charitable donation, not recommended as a gift)
• Contributions to 529 plans

Direct payment of tuition or medical expenses (which don’t count against the annual limit)

Making these gifts before year-end can reduce the size of your taxable estate and help loved ones financially without any adverse tax consequences.

If you’ve experienced income changes during the year such as a raise, job change, or investment gains, it’s wise to check your tax withholding and estimated payments. Underpaying taxes throughout the year can result in penalties, while overpaying means giving the government an interest-free loan.

Use the IRS withholding calculator or consult with your PIM Tax professional to adjust your withholdings before year-end. Making an estimated payment by January 15 can help avoid penalties if you expect to owe additional taxes.