Year-End Financial Wrap-Up and Looking Ahead to 2026
As the year winds down, it’s a great time to pause, reflect, and review your finances. 2025 brought a handful of changes, and there are a few more coming in 2026 that are worth having on your radar. Think of this as the financial version of checking your list twice. 🎅
A few quick year-end reminders
2025 is quickly coming to an end, so now’s the time to make sure the basics are covered. If you’re contributing to a work retirement plan like a 401(k) or 403(b), consider whether you can maximize your contributions before December 31. (IRAs and Roth IRAs get a little more breathing room, you can still fund those until April 15, 2026.)
Any tax planning moves you want to count for 2025 such as Roth conversions, tax-loss harvesting, or charitable gifts, need to be completed by year-end. Also, don’t forget to check your FSA and HSA balances. HSAs can continue to grow, but many FSAs are still “use it or lose it,” so it’s worth a quick look now rather than later.
What changed in 2025
This year brought some generally positive updates (as well as positive markets, which is nice when reviewing account balances). The standard deduction increased across all filing statuses, which helps reduce taxable income for most households. The Child Tax Credit went up and is now indexed for inflation. There was also a significant increase to the SALT deduction cap for 2025, which is especially helpful for those in higher-tax states like California.
On the longer-term planning side, estate and gift tax exemptions remained elevated and continue to adjust for inflation. And SECURE 2.0 continued to roll out, including higher catch-up contribution opportunities for some retirement savers.
A few “good to know” changes
There are a number of unique changes that won’t apply broadly, but here are a few to be aware of. Depending on your situation, you may see benefits like no tax on tips, a new above-the-line deduction for qualifying personal auto loan interest, or the ability to deduct charitable gifts (up to $1,000) even if you don’t itemize. Some overtime income may qualify for a separate deduction, and there’s also an enhanced standard deduction for those age 65 and older. Many of these items have specific rules and qualifications, so if anything sounds relevant, it’s a good idea to dig a little deeper or check with your tax professional.
Looking ahead to 2026
Next year brings a few changes to keep on your radar. Higher-income earners may be required to make certain catch-up retirement contributions as Roth rather than pre-tax. And more SECURE 2.0 provisions are coming online, including expanded automatic enrollment and escalation for employer retirement plans.
By being informed and intentional, you can make the most of your finances. A few thoughtful decisions before year-end can help you make the most of the options available to you.
Wishing you a Merry Christmas and Happy New Year! 🎄✨
