As the year comes to a close, it’s a good time to evaluate the financial decisions that can have a lasting impact on your wealth plan. Year-end investment planning is more than checking boxes. Decisions involving taxes, retirement accounts, charitable giving and health savings accounts can create opportunities to reduce future tax liabilities and strengthen your long-term financial plan. Some strategies may need to be completed before December 31, while others simply warrant an annual review.
Closing out the year
Every financial plan is unique, even between spouses, but there are several year-end decisions that can have a meaningful impact on taxes, retirement income and long-term wealth planning. Given the wide range of considerations involved, year-end can be an ideal time to review priorities with your Huntington wealth advisor and identify opportunities before key deadlines pass.
Reduce your tax bill
A good place to start is by reviewing opportunities to manage your tax liability before the start of a new year. Small actions taken before the end of the year can sometimes create meaningful savings, particularly when they are coordinated with retirement, charitable contributions and income planning decisions. The provisions enacted under H.R. 1, One Big Beautiful Bill Act (OBBBA) continue to influence many tax planning decisions, making year-end reviews especially important.
Consider deferring income
As you plan for year-end, consider whether shifting income between tax years could improve your overall tax outcome. Deferring income may be beneficial if you expect to be in a lower tax bracket next year, while recognizing income sooner may make sense in certain situations, particularly when future deductions are expected to be more limited.
For example, you might be able to delay receiving a year-end bonus or postpone collecting business income, rent or payments for services. Doing so could help you push the associated tax liability into the following year.
Even if your income stays consistent, remember that tax bracket thresholds typically increase over time with inflation. H.R. 1, One Big Beautiful Bill Act (OBBBA) made the seven individual federal income tax rates permanent, including the top 37% rate, while the income thresholds for each bracket continue to adjust annually1. That added certainty may make it easier to compare the potential tax impact of recognizing income now or deferring it to a future year.
However, deferring income may not always be the better choice. Taxpayers in the top bracket may face limitations on certain itemized deductions, so the timing of income and deductions should be evaluated together.
IRA to Roth IRA conversions
A Roth conversion may be worth considering if you expect future tax rates to be higher than they are today or if large retirement account balances could create higher taxable income later in retirement. While you’ll generally owe taxes on the amount converted now, qualified withdrawals from a Roth IRA are tax-free, potentially creating greater flexibility in the future.
If your modified adjusted gross income (MAGI) falls within the applicable phaseout range, the amount you can contribute directly to a Roth IRA may be reduced or eliminated. For tax year 2026, the phaseout range is $153,000 to $168,000 for single filers and heads of household and $242,000 to $252,000 for married couples filing jointly2. Some investors who cannot contribute directly may consider making an after-tax contribution to a traditional IRA and then converting it to a Roth IRA. This strategy can have additional tax consequences, so consult your tax advisor before moving forward.
Roth conversions are becoming more common, especially as more people retire with large IRA or 401(k) balances. These accounts can lead to higher taxable income in retirement – and potentially create tax issues for heirs. Converting some of those funds to a Roth now could help reduce future required minimum distributions (RMDs) and lower estate and income taxes down the road.
IRA to Roth IRA example
A 65-year-old retiree has a $2 million IRA rolled over from a 401(k). They don’t need to take RMDs until age 75. Their current income is modest and comes primarily from investment gains and dividends, placing them in the 22% tax bracket. But once RMDs kick in, they expect to be in the 32% bracket. By converting just enough IRA funds now to stay within the 22% bracket, they could reduce the size of future RMDs and avoid a bigger tax hit later. In addition, they may be able to retain the benefits of certain tax deductions by keeping their future taxable income at a lower level.
Tax-loss harvesting
Tax-loss harvesting can be a useful strategy when market volatility creates unrealized losses in a portfolio. Realizing those losses may help offset capital gains elsewhere and improve after-tax investment results, particularly in years when investment gains are unusually high.
Itemized deductions
Itemizing deductions may be worthwhile when your eligible expenses exceed the standard deduction. That decision can change from year to year, particularly when unusually high medical expenses, mortgage interest, state and local taxes or charitable contributions are involved. For tax year 2026, the standard deduction amounts are3:
- Single filers: $16,100
- Married couples filing jointly: $32,200
- Head of household: $24,150
Seniors over the age of 65 may be eligible to claim an additional standard deduction of $2,050 for single filers and $1,650 for joint filers.
Consider whether deductible medical expenses, mortgage interest, state and local taxes and charitable contributions collectively exceed the standard deduction. In some cases, strategically timing deductible expenses or charitable gifts within the same tax year may make itemizing more beneficial.
If it appears that you will owe federal income tax for the year, evaluate whether increasing your remaining withholding could help cover the shortfall. One advantage of this approach is that withholding is treated as if it were paid evenly throughout the year, regardless of when the money is actually withheld. This can help offset missed or underpaid quarterly estimated tax payments. Don’t forget that you can also make an additional estimated tax payment before the applicable deadline.
Even retirees without employment income can use a similar strategy by making a withdrawal from an IRA and increasing the federal tax withholding amount, as this can help avoid penalties and iron out tax obligations.
Annual retirement steps
Year-end is a good time to review your asset allocation across both retirement and non-retirement accounts. If you’re 73 years or older, don’t forget to take your Required Minimum Distributions (RMDs) from traditional IRAs and employer-sponsored retirement plans.
Healthcare accounts
Healthcare expenses can have a major influence on your tax strategy. While it’s difficult to predict exactly how much you may spend on medical bills each year, there are ways to potentially save money and help protect your financial health.
Flexible spending account (FSA)
With a flexible spending account (FSA), pre-tax dollars can be used to pay for eligible out-of-pocket healthcare costs, including medical, dental and vision expenses. Employees can make contributions of up to $3,400 to a health care FSA. Because FSAs are generally subject to use-it-or-lose-it rules, review your employer’s plan provisions and remaining balance before year-end.
Health savings account (HSA)
Meanwhile, a health savings account (HSA) allows unused funds to roll over year to year, meaning you can earn interest and build savings for future medical expenses. The contribution limit for this tax year is $4,400 for individual coverage and $8,750 for a family, with an additional $1,000 annual contribution for people aged 55 and over5. In most cases, HSA contributions are tax-deductible.
Consider using your HSA as a long-term retirement planning tool. By covering current healthcare costs, such as co-pays and deductibles, with non-HSA funds while you’re working, you can invest your HSA contributions. This strategy allows you to grow a tax-free pool of funds to use for qualified medical expenses during retirement.
Charitable giving
Charitable giving can serve multiple purposes within a wealth plan. Depending on your goals, a charitable contribution may help support causes you care about, reduce taxes and transfer appreciated assets in a tax-efficient manner. Year-end is often a natural time to review planned gifts and determine whether additional opportunities exist before the calendar year closes.
Charitable contributions remain an important planning strategy, especially if you itemize deductions on your federal tax return. Generally, you can deduct contributions, but there are limits based on your adjusted gross income (AGI):
- Cash gifts to public charities: Up to 60% of your AGI
- Non-cash gifts: Generally up to 20-30% of your AGI, depending on the type of asset and organization
- Excess contributions: Can be carried forward for up to five years
Instead of cash, consider donating appreciated assets like stocks. This can increase your tax benefit by avoiding capital gains tax while still receiving a deduction.
Charitable giving considerations under OBBBA
Under H.R. 1, One Big Beautiful Bill Act (OBBBA), non-itemizers may now deduct up to $1,000 for single filers and $2,000 for married couples6. For itemizers, charitable deductions must now exceed 0.5% of AGI to qualify.
Additionally, taxpayers in the highest tax bracket may see the value of certain charitable deductions capped. Because of these changes, it may be worthwhile to review the timing of planned charitable gifts and evaluate how they fit within your tax strategy. That said, many taxpayers may find the actual dollar impact of this change to be modest, meaning charitable decisions can continue to be driven primarily by philanthropic goals rather than tax considerations.
Qualified charitable distribution (QCD)
If you’re 70 ½ years or older, you can make a qualified charitable distribution (QCD) directly from your IRA to a qualified charity, up to $111,000 annually7. This counts toward your RMD and can reduce your taxable income.
QCD example
If you’re required to withdraw $100,000 from your IRA and direct $50,000 to a qualified charity via a QCD, the charitable distribution can satisfy half of the RMD. Only the remaining $50,000 of the required distribution would generally be included in taxable income.
QCDs can also help lower future RMDs by reducing your IRA balance. Just note that donor-advised funds and private foundations do not qualify for QCDs.
Don’t forget about annual gifts
The annual gift tax exclusion for this year is $19,000 per recipient, without triggering gift tax reporting. For example, a married couple can give up to $38,000, $19,000 per individual, to each of their children8.
Additionally, direct payments for tuition or medical expenses are excluded from the annual limit.
Make moves to strengthen your balance sheet
Sometimes the most effective year-end planning opportunities have less to do with income or deductions and more to do with how assets are organized, managed and aligned with long-term goals. Reviewing your overall balance sheet can help identify opportunities to simplify finances and improve coordination across, investment, tax and estate planning strategies.
Year-end can be a good time to review account structures, beneficiary designations and overall asset location. Consolidating accounts where appropriate may simplify planning, improve oversight and make it easier to coordinate long-term financial decisions.
