Year-End Tax Planning: Important Tax Savings Before December 31
By Desiree F. Rivera, Esq.
The end of the year is an important time to evaluate tax efficient gifting strategies and ensure your estate plan remains aligned with upcoming federal changes. With major shifts to the federal estate tax exemption scheduled for 2026, proactive planning before December 31, 2025, can provide meaningful long-term benefits.
Read below for an overview of key year-end planning opportunities and upcoming changes that may affect individuals, families, and business owners.
Annual Gifting Opportunities
Individuals may give up to $19,000 per person tax free, and married couples may give up to $38,000 per person. Making gifts before year-end can help reduce future estate tax exposure while supporting children, grandchildren, or other intended recipients.
Ways families may use year-end gifting include:
- Help a child or grandchild expenses like rent or holiday travel
- Contributing to a 529 plan
- Support a family member facing year-end expenses
Pay Upcoming Bills Now to Save Taxes
Certain expenses paid before December 31 may help lower your 2025 tax liability. Year-end is an ideal time to assess upcoming payments and determine whether accelerating those expenses into the current year is beneficial.
Depending on your circumstances, year-end bills may include:
- Paying any outstanding property taxes while still in December
- Deductible business purchases before year-end
- Medical or dental appointments you have been delaying
- Paying charitable pledges before the close of the tax year
Charitable Gifting
Charitable contributions made by December 31 may provide valuable tax advantages. Year-end giving can support meaningful causes while potentially reducing taxable income.
Common year-end giving strategies include:
- Making a holiday gift to a qualified nonprofit, school, or faith-based organization
- Qualifying contributions to a donor advised fund
- Supporting qualified local causes or community needs
Review Your Estate Plan
Life changes and your plan should too. Consider reviewing your estate planning documents if:
- It has been more than five years since your last review
- Your documents may be outdated
- You have new children or grandchildren
- You have acquired new assets or property
- You have questions about trust administration
Upcoming Changes After 2025
Significant changes are coming to the federal estate tax exemption after 2025. Reviewing your trusts, business structures, and tax planning strategies now can help minimize future exposure and position you to take advantage of current planning opportunities.
Helpful steps to consider include:
- Assessing whether additional gifts make sense before the exemption increases
- Reviewing trust structures or business entities as part of year-end planning
- Identifying whether an estate freeze strategy could apply to your situation
- Ensuring your overall estate plan remains aligned with the upcoming changes
Planning ahead can provide lasting tax savings and preserve more for your intended beneficiaries.
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Meet Desiree Rivera Esq.
Associate, Law Stein Anderson, LLP
Desiree Rivera, Esq. focuses her practice on estate planning, business planning, and trust administration matters. She prepares individually crafted estate planning documents, including revocable and irrevocable trusts, wills, powers of attorney and other estate planning vehicles for clients with modest estates as well as those with a large, complex portfolio of assets. Desiree routinely forms business entities, such as LLCs, and prepares a variety of corporate documents to fit her clients’ needs.