As the calendar winds down, the window for meaningful tax‑planning actions closes fast. Between deductions, credits, retirement‑account moves and tax‑efficient gifting, the choices you make in this season can shape your tax bill and your longer‑term financial life. Putney Financial’s holistic wealth‑management approach reminds clients that year‑end tax planning is not just about saving this year’s tax it’s about positioning your entire roadmap. In this article you’ll find the major year‑end tax moves to address now: how to handle deductions, how to think about Roth conversions, and how to integrate these into your overall plan.
Focus on Deductions
One of the most direct levers you have before year‑end is deductions. Taking steps now can reduce taxable income, optimize itemization vs. standard deduction, and position you for the year ahead.
Accelerate deductible expenses
If you expect to itemize, consider moving deductible expenses into this calendar year rather than delaying until next year. For example: paying a state income‑tax estimated payment for Q4 early, prepaying property taxes (if allowed), or consolidating charitable contributions. Bunching deductions can push you above the standard‑deduction threshold, making itemizing worthwhile.
Watch the itemize vs. standard trade‑off
With the standard deduction high for many taxpayers, the question is: will you exceed it? If not, some strategies may shift to accelerating deductions (and thus itemizing) this year and taking standard deduction next year. Managing the mix can reduce your tax drag. For example, you may donate more this year, prepay some deductible expenses, or structure other deductions so they cluster in this calendar year.
Harvest losses and avoid surprise gains
If you hold taxable investment accounts, losses realized before year‑end can offset gains and, to some extent, ordinary income. At the same time, purchase of new mutual‑fund shares or late‑year capital gains distributions may trigger taxable events. Monitor your holdings and capital‑gain exposure carefully.
State & Local Tax (SALT) and other limit changes
Pay attention to legislative limits. For example some states or tax rules update deduction ceilings (such as SALT) which may affect whether accelerating state‑tax payments or property taxes is beneficial. Act‑now choices may make a difference if the ceilings tighten next year.
What Putney Financial brings
While Putney’s website doesn’t publish a full list of year‑end tactics, they emphasize managing your overall plan: “We analyze your situation and listen to your plans … We help you set realistic goals and manageable action steps.” Their financial‑planning service implicitly covers year‑end tax planning as part of the holistic process.
Roth Conversions & Retirement‑Account Moves
Beyond deductions, the strategic use of retirement accounts is a powerful year‑end tax lever.
Consider a Roth conversion
A conversion from a traditional IRA (or qualified plan) to a Roth IRA requires paying income tax now, but sets up future tax‑free growth and withdrawals. If you anticipate being in a lower tax bracket this year (or expect tax rates to increase in the future), a Roth conversion may make sense. Especially if you have funds available to pay the tax without disturbing your investment portfolio.
Manage Required Minimum Distributions (RMDs)
If you’re at the age where RMDs apply, make sure you don’t miss your deadline. Failure can trigger large penalties. Also consider if a Qualified Charitable Distribution (QCD) makes sense: transferring funds directly from an IRA to a qualified charity satisfies the RMD and removes the amount from taxable income.
Max out contributions
Ensure you maximize pre‑tax retirement contributions and catch‑up contributions (if eligible). Contributions to 401(k), 403(b), traditional IRA or HSA (if available) reduce taxable income now and continue working as tax‑advantaged vehicles.
Asset location and tax efficiency
As you consider these retirement‑account moves, think about where to hold certain assets: high‑growth assets may belong in Roth accounts where growth is tax‑free; bonds or less‑tax‑efficient holdings may stay in taxable accounts or traditional pre‑tax plans. A year‑end check can align your asset‑location strategy.
What Putney Financial brings
Putney’s portfolio‑management service and life‑planning service emphasize aligning retirement‑account strategy with your broader goals. The advantage is you don’t treat a Roth conversion in isolation you see how it fits with your retirement timing, income needs and legacy goals.
Gifting and Charitable Strategies
Year‑end is also prime time for tax‑efficient giving and strategic asset transfers—which serve not only tax reduction but also your philanthropic or legacy goals.
Charitable deductions and accelerated giving
If you donate to charity this year, make sure you understand how the timing and vehicle affect your deduction. Giving appreciated securities (instead of cash) can provide dual benefit: you deduct fair market value and avoid capital gains tax. Using donor‑advised funds (DAFs) allows you to lock in a deduction this year while distributing to charities later.
Transfer assets or leverage trust/gift strategies
For high‑net‑worth individuals, year‑end may trigger gifting moves: funding 529 plans, giving annual‑exclusion gifts, or establishing/adjusting trusts. While gift‑and‑estate rules may change, acting now can preserve more value.
Qualified Charitable Distributions (QCDs)
If you’re 70½ + years old (or the age threshold that applies), making a direct transfer from your IRA to a qualified charity (QCD) can satisfy your RMD and avoid increasing your taxable income.
What Putney Financial brings
Charitable‑giving services at Putney explicitly mention donor‑advised funds, private foundations, gifts of real estate and complex assets. They emphasize integrating giving into the wealth‑management picture not as an afterthought.
Linking to Your Financial Plan
Making year‑end tax moves is important—but only when these moves fit into your financial plan. That’s where Putney’s holistic process shines.
Align tax moves with your goals
Your tax strategy should map to your life goals: retirement timing, lifestyle, legacy, giving. Ask: will this Roth conversion accelerate my income tax too much? Will accelerating deductions hurt next year’s standard deduction eligibility? Does this gift fit my legacy plan?
Monitor liquidity and cash‑flow impacts
Year‑end moves often involve paying taxes, making large gift contributions, or shifting assets. Ensure your cash flow and liquidity allow these moves without scrambling or selling assets opportunistically.
Review your plan annually
As each year closes, review your plan. Have your goals shifted? Has your income changed? Are there new tax‑law changes (e.g., deduction limits, retirement‑account rules) you must factor in? A structured review keeps your tax planning from becoming disjointed.
Integration of investment strategy, risk and tax
Tax moves should not drive your investment strategy in a way that increases risk or undermines your asset allocation. Putney’s model of separate customized portfolios and integrated planning helps balance taxes, risk, return and life‑planning.
Implementation Checklist
Here’s a streamlined year‑end tax‑move checklist to run through. Use this as a discussion‐starter with your tax advisor and wealth manager.
- Estimate your current year’s taxable income and projected tax bracket.
- Check if you’ll itemize or take standard deduction; decide if accelerating deductions makes sense.
- Review state and local tax payments: can you prepay some to this year?
- Examine portfolio for realized/unrealized gains and losses; consider tax‑loss harvesting.
- Review retirement‑account contribution status; make any catch‑up contributions.
- Evaluate whether a Roth conversion makes sense given your bracket, cash availability and longer term horizon.
- If you’re required to take an RMD, verify that it’s been taken or plan it; consider QCD if eligible.
- Map charitable giving: decide amount, vehicle (cash, appreciated assets, DAF), timing.
- Confirm gifting/estate‑planning moves: annual exclusion, 529 plans, trusts.
- Ensure liquidity and cash flow support these moves without undue stress on your portfolio.
- Schedule early‑next‑year review to assess how these moves impacted your full‑year numbers and plan next year’s moves.
Year‑end tax planning offers more than one‑off savings it’s about integrating key moves (deductions, Roth conversions, gifting) into your broader financial journey. With the holistic wealth‑management framework used by Putney Financial you combine tax‑efficiency, life goals, investment strategy and legacy planning. Acting before December 31 can make a meaningful difference. If you’d like help mapping your own year‑end tax‑move roadmap or aligning it with your wealth plan, I can assist you.