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#75 - Year-End Tax Planning Checklist for 2025

In this episode of The Simply Retirement Podcast, Eric Blake walks listeners through a year-end tax planning checklist designed to help retirees and pre-retirees take smart, strategic action before December 31st. He discusses six major areas of focus—from income and contributions to charitable giving and deductions—so you can finish the year strong and potentially reduce your 2025 tax bill.

Introduction

Eric Blake: On today’s show, we’re going to talk about something that could potentially save you real money before December 31st—your year-end tax planning checklist.

Welcome to another episode of The Simply Retirement Podcast, where we want to empower and educate women to live your retirement on your terms. I’m your host, Eric Blake, practicing retirement planner with over 25 years of experience, founder of Blake Wealth Management, and I would not be the man I am today without the women in my life.

As this episode is being released, we should be somewhere toward the latter part of October, getting into November. This is the time of year when we sit down with every client to review their year-end tax planning checklist. We do it now because we want to get it done before the busyness of the holidays. Family gatherings take over, so there’s still time to take meaningful action before December 31st.

This year, the process is especially important because of the new tax law and its potential implications. The changes create both opportunities and risks, and if you miss some steps, you could overlook strategies that might save you a good amount of money in taxes this year.

Today, I’m going to take you through that checklist and give you some specific actions you can take as you review your own tax plan for this year.

Eric Blake: Joining me once again is Wendy McConnell. Wendy, how are you?

Wendy McConnell: I’m good. How are you?

Eric Blake: I’m well. I always enjoy the tax planning stuff, so I’m excited.

Wendy McConnell: I can tell! I see your tone and your face—just light up—ah, taxes again!

Eric Blake: Hey, we’re going to talk about how you can save on taxes, though. How’s that?

Wendy McConnell: All right, that sounds good.

Why Year-End Planning Matters

Eric Blake: Here’s basically how our process works—I’m going to walk through that because I think it’ll be helpful. When we receive a client’s prior-year tax return, we create what we call our Tax Summary and Observation Report. That’s where we highlight key figures and look for potential planning opportunities for the year.

From there, we build a tax projection for the current year, looking again at potential planning opportunities. In many cases, we can create different scenarios based on what could happen during the year, so at least we have something to compare.

This typically happens around April or May—right after tax season—when we start asking clients for their returns. Of course, there are always a few stragglers filing extensions, but as soon as we receive a tax return, we prepare that initial summary report.

Then, we move into this time of year—October and November—where we use our Year-End Checklist to decide what specific actions need to be taken before December 31st, before things start getting crazy with the holidays and everything else that goes on in our lives.

Today, you’ll get to follow along with that same exact process. I’ll walk through our year-end checklist, and as part of this episode, I’ll share a copy of our End-of-Year Planning Issues Checklist that you can use to go through the process on your own.

Wendy McConnell: Okay, let’s do it

!Eric Blake: And, as always, just a quick reminder—

For all the links and resources shared in this episode, you can visit TheSimplyRetirementPodcast.com. If you’ve got a question, topic idea, or a specific retirement challenge you’d like to hear covered on an upcoming episode, visit TheSimplyRetirementPodcast.com/AskEric.

Before we get into the details, I’ll remind everyone—when you talk about tax planning, you always want to consult your tax advisor and your financial advisor before implementing any strategies.

Nothing we’re going to talk about today is a specific recommendation. There will be several strategies that may not apply to every listener, and there are others we won’t cover that might apply to your particular situation—especially if you’re a business owner, since we don’t typically work with many of those.

So always look at your own situation and decide what makes sense for you.

Most of our clients are women with $500,000 or more in retirement or investment assets. They’re using those dollars—plus Social Security—to cover their income needs in retirement. So that’s the group this episode will apply to most.

When I go through this, I’m going to break it down into six primary areas:

Income review
Maximizing contributions
Managing distributions
Family gifting strategies
Deductions
Big-picture tax planning ideas

Wendy McConnell: All right, let’s get into it.

Eric Blake: Let’s do it.

Step 1: Review Your Income

Eric Blake: This first one is pretty obvious—but important.

Ask yourself: “What is my income, and where is it going to come from this year?”

Is it earned income? Social Security? Investment income? IRA distributions?

You want to identify the sources of income and the amount from each source.

Also ask: “What’s different this year?”

Did you sell an asset? Receive an inheritance? Something unusual that might change your tax picture?

We had a client last year who received what she thought was a gift from someone she had helped years ago in her business. He sold his company and wrote her a sizable check as a thank-you.

Wendy McConnell: Okay…

Eric Blake: The first thing I asked was, “Are you going to get a 1099 for this gift?” And yes—she did. It turned out not to be a true gift but taxable income. It’s great to receive a check like that, but it changes your tax situation. So you want to understand what’s different this year compared to past years.

Step 2: Maximize Contributions

Eric Blake: Next, let’s talk about maximizing contributions. What accounts should you put money into—and how much can you contribute—especially if you’re still working?

This year, for example:

The basic 401(k)/403(b) contribution limit is $23,500.
If you’re age 50 or older, you get a $7,500 catch-up contribution, for a total of $31,000.
Under Secure Act 2.0, starting in 2025, there’s an additional catch-up if you’re age 60–63—you can go up to $11,250 in catch-up contributions.

Wendy McConnell: Right, but you have to have the money to do that.

Eric Blake: You do—you don’t want to take on credit card debt to max out your 401(k).Wendy McConnell: It’s great that I can add that extra money… if only I had it!Eric Blake: Exactly. But it’s still important to know it’s available.

IRA and Roth Contributions

Eric Blake: Then we get into IRA and Roth IRA contributions. This year, the base maximum contribution is $7,000, and there’s a $1,000 catch-up if you’re age 50 or older—for a total of $8,000.

Always remember that you have until April 15th to make those IRA or Roth contributions for the previous year. If you don’t have the funds now but think you will by April, plan ahead to make sure you’re in a position to contribute.

Then you have to decide whether a deductible IRA or a Roth IRA makes more sense based on your income and tax bracket for the year.

Eric Blake: Also, for higher earners, there are non-deductible IRA contributions—a way to get Roth dollars growing even if you’re above the income limits. These are often done as backdoor Roth contributions, where you make a non-deductible IRA contribution and then convert those dollars to a Roth IRA.

The deadline is still April 15th, but again, these mostly apply to higher-income earners.

Wendy McConnell: All right, two questions. One—you keep saying April 15th. Do you mean April 15th because that’s the deadline to file, or when you actually file?

Eric Blake: April 15th is the deadline to make the contribution even if you’ve already filed your taxes.Wendy McConnell: Okay.

Eric Blake: Now, for self-employed individuals, it’s different. For example, if you’re self-employed and make a SEP IRA contribution, you can include extensions when filing your taxes. But for traditional IRAs and Roth IRAs, April 15th is the cutoff. If you miss it, you miss it.

Wendy McConnell: Got it. You also mentioned a non-deductible IRA—can you explain that?Eric Blake: Sure. With Roth IRAs, there’s an income limit—if you make too much money, you’re not eligible to make a Roth contribution. However, anyone can make a traditional IRA contribution regardless of income.

What changes is whether that contribution is deductible. If your income is below a certain threshold, your traditional IRA contribution might reduce your taxable income. But if your income is above the limit, that contribution becomes non-deductible—it won’t lower your taxes today, but it will still grow tax-deferred.

Wendy McConnell: So it doesn’t save you on taxes now, but it still grows over time?

Eric Blake: Exactly. It doesn’t help you today, but it grows tax-deferred. And depending on your situation, you could then convert it into a Roth IRA later—what’s known as a backdoor Roth conversion.

Just be aware of pro-rata rules and always make sure you file IRS Form 8606 when you make a non-deductible contribution or a Roth conversion. That form proves to Uncle Sam that you’ve already paid taxes on those dollars.

Health Savings Accounts (HSA)

Eric Blake: Continuing on, let’s talk about HSA accounts. Health Savings Accounts are one of the most valuable retirement savings tools out there because they offer a “triple tax advantage.”

Contributions are tax-deductible—they reduce your taxable income.
Growth is tax-deferred—you don’t pay taxes as the account grows.
Withdrawals are tax-free when used for qualified healthcare expenses.

There’s really nothing else like that.

For 2025, the limits are $4,300 for individuals and $8,550 for families. If you’re over age 55, you get an extra $1,000 catch-up contribution.

Wendy McConnell: Now, this is always through your employer, right?

Eric Blake: Not necessarily. It depends on the type of health plan you have. You must be covered by a high-deductible health plan (HDHP) to be eligible for an HSA.

Wendy McConnell: See, that’s where I get stuck. We have an employer-funded plan through my husband’s work, and it’s not an HSA—it’s something else where we have to use the money or lose it.

Eric Blake: That’s a Flexible Spending Account (FSA)—different from an HSA. The FSA is “use it or lose it” each year. You can carry over a small amount, but in general, if you don’t spend it, it’s gone.

An HSA, on the other hand, rolls over year after year. You can even invest those funds. I often tell clients, if you can afford to pay out-of-pocket for current medical costs, let your HSA dollars grow tax-free instead.

You can always reimburse yourself years later. For example, if you put money into an HSA at 55, you could come back at 65 or 70 and reimburse yourself tax-free for medical expenses from years ago. That gives the money decades to grow.

Wendy McConnell: That’s really valuable.

Eric Blake: It is. But most people treat HSAs like FSAs—they spend the money right away instead of letting it compound.

529 Education Accounts

Eric Blake: Lastly, under contributions, let’s talk about 529 plans—education savings accounts.

These are primarily used to fund college or other qualified education expenses. Some states even provide a state income tax deduction for contributions.

Here in Texas, we don’t have state income tax, so there’s no state deduction. But if you live in a state that offers it, it can be worth contributing before year-end—especially if you’re helping children or grandchildren.

Make sure those contributions are made properly and recorded for your state benefits if applicable.

Step 3: Manage Distributions

Eric Blake: Now, let’s move into distributions—this is where things can get costly if you’re not paying attention.

First up, Required Minimum Distributions (RMDs). If you’re age 73 or older, you’re required to withdraw a minimum amount from your retirement accounts each year. Missing that deadline can be expensive.

The penalty used to be 50% of the amount not withdrawn—but Secure Act 2.0 reduced that to 25%, and possibly 10% if you correct it quickly. Still, it’s something you don’t want to mess with.

Make sure your RMDs are fully distributed by December 31st.

That brings us to Qualified Charitable Distributions (QCDs). These allow you to give directly from your IRA to a qualified charity and avoid paying taxes on that distribution.

You can start QCDs as early as age 70½, even though RMDs now start at 73 (and 75 if you were born in 1960 or later).

Example: If your RMD is $10,000 and you send $5,000 directly to a charity like the American Heart Association, you only pay tax on the remaining $5,000.

It’s a great way to give charitably and reduce your taxable income—especially since most retirees don’t itemize deductions anymore.

Eric Blake: The key is this: The money must go directly from your IRA to the charity.

We actually issue clients a checkbook tied to their IRA just for this purpose. Write the check directly to the charity, and make sure it clears your IRA account by December 31st.

Custodians don’t mark QCDs on your tax form, so keep documentation from the charity confirming the gift.

Roth Conversions

Eric Blake: Next up—Roth conversions. When thinking about what tax bracket you’re in, consider converting up to the top of your current bracket if possible—especially if you expect to be in a higher bracket later.

What we typically do is run projections to determine the maximum conversion amount that keeps you within your current bracket. For example:

If you’re in the 12% tax bracket, how much can you convert while staying under that limit?
If you’re in the 22% bracket, how much room do you have before bumping into the next one?

Sometimes, a client may choose to convert less than the full amount—and that’s completely fine. The goal is to use your bracket efficiently.

There are other planning reasons, too. For example, if you recently lost a spouse, you might still be filing as Married Filing Jointly this year but will file Single next year. That means future brackets could be much higher. In that case, it might make sense to convert more this year than the bracket alone would suggest.

Eric Blake: So, if you’re in a lower-income year, Roth conversions can be a powerful tool. But you have to run the numbers carefully—you don’t want to convert so much that you push yourself into a higher tax bracket or trigger Medicare IRMAA surcharges.

Bottom line—before doing Roth conversions, do some projections or work with a professional to determine:

How much room you have before the next tax bracket.
Whether the conversion will impact Medicare premiums or other thresholds.

Wendy McConnell: Right, because you want to know how much you can convert before it bumps you up.Eric Blake: Exactly. That’s the key.

72(t) Distributions

Eric Blake: Now, let’s talk about 72(t) distributions, also known as Substantially Equal Periodic Payments (SEPPs).

We actually discussed these back in Episode 57, “Seven Ways to Access Your Retirement Accounts Early Without a Penalty.”

A 72(t) allows you to withdraw from your IRA before age 59½ without the 10% penalty—as long as you agree to take a specific amount out each year for at least five years or until you reach age 59½, whichever is longer.

So, if you start at age 50, you’ll need to continue until 59½. If you start at 55, you’ll continue until age 60.

Once you start, you can’t change the amount or stop early—otherwise, you could face retroactive penalties on all previous withdrawals.

Wendy McConnell: So it’s kind of like one of those “zero-interest financing” deals—if you mess up one payment, you owe all the interest from the start.Eric Blake: That’s actually a perfect analogy. Yes—if you break the rule once, all the old withdrawals could be penalized.

So, if you’re under a 72(t) arrangement, make sure you take those distributions on time and for the correct amount each year.

Tax Withholding and Estimated Payments

Eric Blake: Another key part of managing distributions is reviewing your tax withholding or estimated payments.

You want to double-check that you’re withholding enough to avoid penalties. There’s something called the safe harbor rule, which allows you to avoid interest and penalties as long as you’ve paid:

At least 90% of your current year’s tax liability, or
100% of last year’s tax liability (110% if your income is high).

If you’ve had unexpected income this year—like a capital gain or large IRA distribution—you may need to adjust your withholding or make an extra estimated payment before December 31st.

Sometimes we’ll even withhold tax directly from a year-end IRA distribution to make up the difference. It’s a simple way to stay compliant and avoid surprises in April.

Step 4: Family Gifting Strategies

Eric Blake: Let’s move into family gifting strategies.

If you’re planning to gift money to children or grandchildren, there are a few ways to do it efficiently:

If you own highly appreciated assets like stocks or mutual funds, you might gift those instead of cash—especially if the recipient is in a lower tax bracket.
For 2025, the annual gift tax exclusion is $19,000 per person, per recipient.

That means you can give $19,000 to as many people as you’d like without having to file a gift tax return.

Eric Blake: There are a couple of additional strategies to know about:

If you pay tuition directly to a school on behalf of a child or grandchild, that amount doesn’t count toward your $19,000 annual exclusion.
The same applies if you pay medical expenses directly to a provider.

It’s a great way to support family members while also reducing the size of your taxable estate.

Eric Blake: And don’t forget about 529 plan contributions—those count as gifts too. The annual exclusion is still $19,000 per beneficiary, but you can also front-load contributions.

That means you can contribute up to $95,000 in one year, which counts as if you gave $19,000 per year over the next five years. It’s a unique feature of 529s that can be very powerful for estate or education planning.

Step 5: Deductions

Eric Blake: Now, let’s move into deductions. There are two main types:

Standard Deduction
Itemized Deductions

For 2025, the standard deduction has increased:

$31,500 for Married Filing Jointly
$15,750 for Single Filers

So, for most retirees, you would need more than $31,500 in itemized deductions before it makes sense to itemize.

Eric Blake: Common itemized deductions include:

State and local taxes
Property taxes
Mortgage interest
Charitable contributions
Medical expenses above 7.5% of your Adjusted Gross Income (AGI)

Since the Tax Cuts and Jobs Act took effect in 2018, about 90% of taxpayers no longer itemize because the standard deduction is so high.

However, one big change this year is the increase in the SALT (State and Local Tax) cap—from $10,000 to $40,000.

That could mean more people, particularly in high-tax states, might benefit from itemizing again.

Additional Deductions for Age 65+

Eric Blake: There are a few new deductions for 2025 that are especially valuable for retirees.

If you are age 65 or older by December 31st, there’s a new $6,000 per individual deduction available. That’s on top of either your standard or itemized deduction—so if you’re a married couple, that’s $12,000 total added to your deduction amount.

There’s also an additional $1,600 per individual if you’re age 65 or older and taking the standard deduction.

These two adjustments combined could reduce taxable income by a significant amount for many retirees.

Medical and Charitable Deductions

Eric Blake: Let’s talk briefly about medical expenses. You can deduct medical costs that exceed 7.5% of your Adjusted Gross Income (AGI)—but only if you’re itemizing.

If you’ve had a year with major health expenses or are planning an elective procedure, it might make sense to “bunch” those expenses into one calendar year to push them above that threshold.

Now, for charitable deductions, there’s a new 0.5% AGI floor—meaning your charitable giving has to exceed 0.5% of your income before it becomes deductible.

And here’s another change: even if you take the standard deduction, you can now deduct up to $2,000 in charitable contributions if married filing jointly ($1,000 if single).

So, keep records of everything—cash gifts, appreciated stock donations, household items, and any qualified charitable distributions (QCDs).

Eric Blake: For larger charitable goals, consider using a Donor-Advised Fund (DAF). That allows you to make a large, deductible contribution in one year—say $20,000 or $50,000—then distribute the funds to charities over the next several years.

It’s a strategic way to take a big deduction in a high-income year while supporting causes you care about over time.

Other Notable 2025 Tax Changes

Eric Blake: There are a few other changes worth mentioning for this year:

The new Overtime Income Deduction, Tip Income Deduction, and Vehicle Loan Deduction may apply to certain workers depending on their situation.

These are very specific, so consult your tax advisor to determine eligibility.

Eric Blake: Finally, refer back to Episode 65, where we covered the new tax law in more depth—especially if you want more detail on the Tax Cuts and Jobs Act sunset provisions and how they could affect future planning.

Step 6: Big-Picture Tax Planning

Eric Blake: Let’s wrap up with some big-picture planning ideas that tie everything together.

First, understand your provisional income—that’s what determines how much of your Social Security is taxable. If you want to learn more about that, check out Episode 54, where we break it down step by step.

Next, review your investment accounts for tax efficiency:

Are you using tax-free investments like municipal bonds where appropriate?
Are your dividends and capital gains being managed properly within your tax bracket?
Do you have opportunities to rebalance or harvest capital gains at a 0% tax rate this year?

For many retirees, especially those age 65 or older, the new deduction amounts could temporarily lower your taxable income enough to make this possible.

If you’re in a low-income year, consider selling a highly appreciated asset to harvest long-term capital gains at 0%.

Or, if you have investments that are down, sell them to harvest tax losses—you can use up to $3,000 in losses each year to offset ordinary income.

Eric Blake: And don’t forget about IRMAA (Income-Related Monthly Adjustment Amount) for Medicare. Your 2025 income determines your 2027 Medicare premiums. So, if you’re close to an IRMAA threshold, review your current year’s income to see if you can manage it before year-end. Small adjustments—like deferring income or increasing charitable giving—can help keep you below the line.

Estate Planning and Beneficiaries

Eric Blake: Finally, let’s touch on estate planning.

The holidays are often a great time to review your estate plan and beneficiary designations with family members. Make sure everything still reflects your current wishes and that your assets will pass efficiently.

Even small details—like outdated account beneficiaries—can cause big issues later, so this is a good reminder to double-check them annually.

Closing Thoughts

Eric Blake: All right. Any other thoughts, questions, or clarifications?

Wendy McConnell: I think we hit all the important items.

Eric Blake: I think we sure did. Awesome. Well, as you can see, October and November are the best times to sit down and talk through these and work through some of this process. Again, don’t forget, you can download the free End-of-Year Planning Issues Checklist that we’re going to include in the episode summary.

You can go to TheSimplyRetirementPodcast.com or check the episode summary on your favorite podcast platform. You can look at things like maximizing contributions, managing distributions, your charitable giving—all these different variables that we talked about today.

But if you’re also looking to delegate these steps to a trusted advisor or looking for a personalized retirement plan to help you make some of these smart decisions around income, investments, and taxes, you can visit GetMySimplyRetirementRoadmap.com to learn more about our Simply Retirement Roadmap process.

As always, thank you for tuning in. Big thanks to Wendy, as usual, for joining me on this episode. That is it for today’s episode. As a reminder, for all the links and resources, again, visit TheSimplyRetirementPodcast.com. Don’t forget to like, follow, and share the show.

Until next time, please remember—retirement is not the end of the road. It’s the start of a new journey.

Content here is for illustrative purposes and general information only. It is not legal, tax, or individualized financial advice; nor is it a recommendation to buy, sell, or hold any specific security, or engage in any specific trading strategy.

All investing involves risk including loss of principal. Results will vary. Past performance is no indication of future results or success. Market conditions change continuously.

Information here is provided, in part, by third-party sources. These sources are generally deemed to be reliable; however, neither Blake Wealth Management nor RFG Advisory guarantee the accuracy of third-party sources. The views expressed here are those of Blake Wealth Management. They do not necessarily represent those of RFG Advisory, their employees, or their clients.

This commentary should not be regarded as a description of advisory services provided by Blake Wealth Management or RFG Advisory, or performance returns of any client. The views reflected in the commentary are subject to change at any time without notice.