8 Tax Strategies To Consider Before Year-End

Maybe there's rental income , maybe there's part-time income , maybe you're still working , but more often than not , you're wondering hey , what should I do when I may be 60 or 61 and I've got a few years before Social Security gets turned on ? Can I optimize in that time ? So today's episode is going to be about tax planning before the end of the year .

Right now , as I'm recording this , we've got about two months left before , right away . We are now in 2025 . How weird does that sound ? And I'm going to give you the tax strategies that I go over for my clients that want to , of course , save on taxes , which is every single one of them .

So , generally , I'll introduce my tax planning checklist in the summer , because tax planning should not wait until the end of the year .

But there are certain things by the end of the year you want to review and certain things you actually want to wait for and not implement , and I'm going to talk about those today , if you don't already know , my name is Ari Taublieb , I'm a certified financial planner , I'm the host of the Early Retirement Podcast and I'm the vice president on route .

If you are listening to this podcast episode on the podcast apps , great . If you're watching this right now on YouTube , I love it because you can see what I'm going to be going through and you get to actually see my face . So I'm going to go over a few different things today .

Now , first things first , which is , when it comes to tax planning , do not and let me be clear , do not let the tax tail wag the life dog . Well , what does that mean ? That's when people come to me and go like , hey , I'm going to try to decline this bonus because then I'm not going to have to pay taxes .

I go , it's going to be a net positive to you . Yes , you're going to pay taxes , but you're going to make more money , so don't go decline a bonus . Now , most of you are like , hey , did someone really say that ? Yes , okay , in my role , I hear lots of interesting stories , so I'm going to be going through my tax checklist .

Now , if you're wondering about all of the different checklists and charts that I'm always talking about , if you're on YouTube you can see it on my screen , but if you're on the podcast apps listening , you're going to hear me explain it for you . So I have a lots of different checklists . These are called flow charts .

They're within my early retirement academy , so you can see here , if you're asking yourself or when you give to a friend , what issues should I consider when starting out financially . What are the important dates ? Should I use a donor advised fund ? When should I collect my pension ? Am I in a position to retire early ?

What should I do with my concentrated stock position ? How do I think through paying off my mortgage ? Where should my next dollar go ? So on . You can see all of these charts which really help your brain go okay .

So if this is me and I'm a small business owner , or if this is me and I'm wondering when to collect social security , how do I think through that ? So just want you all to be aware , because I get lots of emails saying , hey , should I set up a traditional 401k for my business ? And hey , should I keep adding to my 401k or should I go Roth ?

Of course , there's not every single one , but a lot of these . I mean there's north of 80 of these inside of this academy that our team has put together , so make sure to check those out . I'll use them when I'm meeting with clients , so certainly worth considering .

You can see them on my screen right now , but at the same time you're listening on the podcast app . Ultimately , I just don't want you worried about stuff they don't need to worry about , and too often I find people are worrying unnecessarily . So let's get into the tax tips .

The majority of the things I'm going to talk about today are applying if you're probably a year out from retirement , in retirement or let me think Sorry , milan , I might need one more edit . The majority of the things I'm going to talk about right now are if you're a few years out from retirement or you're in retirement now .

Actually , milan , no , I'm just gonna hop in . So let's go through the eight different tips . Number one is going to be a little bit of a rocket , so let's get into it Now . I'm going to start by going over what I view as the high-impact strategy .

So if you're like , look , I'm already five minutes into this episode and I haven't gotten the guidance I'm looking for and you're already frustrated , it's coming right now . Now , I know that's not most of you , but I want to hear what's helpful and what's not . So please drop in the comments . I want to hear from you guys .

So number one and I'm going to read through my list that I put together here is maximizing savings . Now , a lot of you know that , but when it comes to maxing a 401k , there's a lot of issues that I see .

Some people max out their 401k so early on in the year that they actually forego matching contributions , meaning , if you were to just defer your entire paycheck for January and February , you're like hey , I did awesome , I just maxed out my 401k . Maybe you did , but maybe you actually no longer get the catch-up contribution from your employer .

So there's lots of things that sound like you're kind of doing something . Maybe your neighbor isn't doing , or you're kind of beating the system . Here , for example , I see people going I'm going to do this mega backdoor . I could get more money into my retirement accounts . Isn't that cool ? I go . It's certainly cool . I'm a fan of it .

I've personally done it . But there are also times where I could have done it and I chose not to , and the reason for that is I wanted more liquid funds , because I wanted to travel , because I'm already on track for plenty of retirement money . It's today that I'm worried about .

So I don't want you optimizing on paper , like a lot of people do , who just max out their 401k , because that's what I've done the last 20 years . Now you've got a ton of money , but you want to retire early and we don't have a way to tap into enough of those funds .

So generally , if someone come to me with a really healthy pre-tax balance , I'll say I want you to stop maxing out your 401k .

Now I'm not telling you that because I don't know your situation , but I am saying if you have a healthy pre-tax account and you have followed what's called the rule of 72 , and many of you don't know it , which is okay , but it's basically compound interest let's assume you take the number 10 , okay , and you're getting a 10% return .

What the rule of 72 says is , on average , if you get a 10% return , you will double your money in seven years 7.2 to be specific . But let's be more conservative . Let's assume you're 50 years old , you have a million dollars and you get a 7% rate of return . Let's just say 7.2 for argument's sake .

Well , what that's saying is your money's going to double every 10 years . So you're 50 , you've got a million dollars . When you're 60 , you have 2 million . When you're 70 , you have 4 million . When you're 80 , you have 8 million . Are you going to need 8 million dollars ? Probably not . So is it bad to have ? No , but you get my point .

So now you have $8 million . Well , that's you maxing out your 401k , trying to put as much money in as possible , right ? No , the example I just gave you is assuming your million dollars gets no more money added by you personally and just gets this average growth rate , which , of course , does not happen like that . But it's important to understand .

There might be a point where you don't need to add more money to your 401k . What you need to do is have a brokerage account . That's what's called a superhero account . That's going to help you weather the downturns so you can pull income .

It's going to help you retire earlier because you don't have to wait until 59 and a half or 55 if you elect to use that rule , and it allows you to pay capital gains taxes , which is better than ordinary income . Ordinary income is as if you just made more money .

Getting a W-2 type job versus capital gains is what you pay if you were to sell your home , for example . It's a lower tax bracket , so what you want to do is ensure that you have the right bucket of money in certain accounts . So you want a bucket to be in brokerage , which is after tax .

You want some to be in a 401k , you want some to be in a Roth . You want to optimize that approach . So , in terms of what tips for the rest of the year is right now , if you are once again over 50 years old , you can contribute an additional $7,500 . So max you could put in is $30,500 .

So if you're looking right now going yep , I've got two months left and I'm flexible . I've got my travel fund , I got my car fund , I've got my rainy day fund , I'm good to go .

Well , you might want to go max out that 401k , but more often than not I tell people go get the free money , the rest goes to a brokerage account if you've saved and invested very well in your 401k and it doesn't need more funding . Number two is consider after-tax contributions up to the limit , which is $69,000 plus $7,500 over $50 over 50 .

Not all of you need to do that and with an early retirement , I find many of you have already saved and invested very well , so I actually don't want you to just add more dollars for the sake of the fact that you could . I see too much optimization on that front . Some of you are confused . You're like Ari .

You already said your nickname is optimized because you hate the word fine , which is true . I hate the word fine . That's when people are like how was your weekend ? It's like it was fine . It's like no , no , no , I don't do fine . I do optimize . So they make fun of me here at the company .

But the point here when it comes to your retirement , I don't want you over-saving and over-investing and yeah , that feels weird , coming from a financial advisor , I get that , but I want to make sure that you're not mad at me when you're 75 with $30 million and I want to make sure we're not running out of money too early and there's a balance there .

So next thing is Roth IRAs , traditional IRAs . Make sure you're not contributing to a Roth IRA if you're above the income limit , if you make too much money . I have other videos where I'm going over that , but I'm going to show it to you right now as well , so I'm pulling it up live on my screen .

This is another checklist , another flow chart that if you want access to . Of course everything's in the Academy , so you can see here . I'll scroll down on my important number sheet and we're going to go down to eligibility . If you are single and make over $161,000 , you cannot do the Roth IRA .

You can do a backdoor Roth , but be aware of what's called the pro rata rule . If you don't know what that means , look it up . Pro rata rule . It's very difficult to do a backdoor Roth contribution if you already have money in a traditional IRA .

Now , if you are making over $240,000 and you married , filing jointly , you can see right there and then your ability to deduct a traditional IRA is based on these numbers right here .

I'm highlighting them , but I will say them as well for the podcasters out there If you make over $87,000 , what this means is , if you make over $87,000 and you are covered by a 401k , you cannot also get a deduction for your traditional IRA , which pretty much means you should not be contributing to it because you don't get a deduction for it and when you take

the money out , you're not really being tax efficient . You should have a brokerage account instead . But that is just regarding the important numbers there . Now , going back to what I wanted to go through here , my other list , and this is still I know I'm only on point number one right now traditional Roth IRA .

If you're a small business owner , it doesn't apply to all of you , but SEP IRAs and solo 401ks . $69,000 is the maximum you can put in there and then just know IRA contributions . Those can be made up till you file your tax return . So that one , there's not a huge rush , but 401ks there are . Number two is Roth conversions .

Roth conversions are done by year end , so you don't have until April 15th when you file your taxes . It's a year end decision . Now don't just go do a Roth conversion because you have a huge pre-tax balance and you're 401k . But if you're wondering , hey , should I optimize ?

And you've got Roth conversions that you think you should do , this year and next year are probably good years to do it before tax brackets change in 2026 . So something to consider . Number two , three , excuse me tax loss harvesting . This is when you sell holdings at a loss on purpose , where you're essentially going to take losses .

You can do that up to $3,000 a year . That will reduce your tax liability . Yes , that is a year end decision harvesting . I've heard of that . I'm going to do it when they should be doing what's called tax gain harvesting . That's often more applicable if you are in retirement , your income is low and you have a brokerage account with big gains .

So if you're like those are all me , I'm retired , I bought Apple stock , it's in my brokerage account , it's done really well . I want to pay 0% in taxes . That's how this works . Those are the two that you want to consider . Number four charitable giving . Many of you guys know my donor advised fund examples that I give .

But think about it like this let's assume you give $5,000 a year to a charity and you take the standard deduction every single year . You're being a very nice person and there's nothing wrong with being nice . But if you wanted to give 5,000000 a year for , let's just say , 10 years to the Red Cross , great , they got $50,000 . You're a nice guy , nice gal .

Standard deduction you don't get any tax benefit , you're just helping them out . Now , the way you're giving them money is probably through cash that you're living on , so after-tax dollars . But you can be more efficient . What you can do is say I'm going to take cash or a stock that I have . That's done .

Well , that's gone up in value and I'm going to give it to the Taublieb , which is my last name giving foundation . Why would I do that ? I get a big tax deduction this year . Ooh , that's kind of cool . What if I got like a $50,000 tax deduction and I did a Roth conversion ? Let's assume a lot of you out there are making a lot of money .

You're the Henry's Okay , I don't know if you guys are familiar with the Henry's terms , but if you're a high earner , what I want you to consider is Ooh , we're in a high tax bracket . What do we do to minimize our tax bill ? Well , we've already done the 401k , we've already done the HSA . What else can we do ?

Well , if you're someone that is charitably inclined , and sometimes even if you're not charitably inclined and you like to give through time or another means , it can still make sense financially to do some charitable planning . To the point where I'll ask a couple hey , do you want to do charitable giving ?

And they're like to be honest , yes , but we're just going to donate our time . We're not going to give money . I said that's okay If I told you it would make you more money to do this versus not doing this . Would that be of interest ? They're like well , obviously . So I will explain to them .

Hey , here's the impact , here's when it does make sense , here's when it doesn't make sense . That's what a donor advised fund allows is you're essentially bunching all of your charitable contributions in a single year and then you get to give out of that foundation , so the foundation still gets 5,000 bucks a year . Red Cross is like we don't care either way .

All we did was say I'm going to take $50,000 or 10 years worth of giving at 5K a year , give it to my foundation , I get a big tax deduction . I give 5,000 bucks a year out of that , so I get a big tax deduction . Why is that helpful ?

Well , if we're going to do a Roth conversion or if you're in a high tax bracket , this is going to save you a ton in taxes . That's number four . Number five and I feel like I'm already out of order here , so you guys can correct me if so but um , education funding . So if you're saving for education , consider adding to a 529 .

Also , know the annual gift exclusion amount is $18,000 per donor , per donee . What the heck does that mean ? All right , so my fiance is Alice and my name is Ari . Let's assume I want to give to anyone outside my door right now . I was trying to think of a better story , but I don't have one for you , so I want to give it to someone outside my door .

Well , I could go give them $18,000 and I don't have to file anything . I don't have to file a gift return or a tax return , I don't have to go change my last name . I don't have to do any paperwork . It's awesome . Let's assume Alice wants to give $18,000 to that person also . Well , she can do that too .

So this guy is like what am I the luckiest guy ever ? I just got $36,000 . It's so cool . But let's assume I wanted to give him $20,000 , right , I can only give him $18,000 because once again , that's the annual gift exclusion . The other $2,000 , am I taxed on that right now ? No , I just have to tell the government .

Hey , government , I just gave $2,000 above my annual exclusion , so when I eventually die , take that $2,000 off my bar tab . And some of you are like why would they do this ? Let's assume I was worth $20 million . You know what would happen . A lot of people would want me dead .

But let's just assume I was worth $20 million , which I am not , but let's assume . Well , if this guy outside is like hey , ari , you just gave me $18,000 . I heard you have $20 million , can you give me $10 million right now ? I was like , of course you seem nice , here's $10 million . You know , what's going to happen is one day I'm going to pass away .

Maybe I'm worth $50 million . And what if that guy outside is my beneficiary ? He's like I just hit the lotto . Ari gave me $10 million . I just passed . Ari passed away $50 million , I just got $60 million . This guy is the greatest man ever . But the government is going to be like hey , ari , you cheated .

And then I'm going to be like I didn't cheat , what do you mean ? And they're like you can't give someone $10 million and then also pass away and assume that they're not going to pay any taxes . Like that's cheating . The government will be like Ari , you can only do $18,000 a year .

Anything beyond that , well , that comes back at the end it gets added back on . So basically , the government's like look , you have a bar tab . You can , for example , give $18,000 a year . You want to give another $100K beyond that ? Great . But if the annual gifting exclusion is $5 million , which it's not .

But let's just , for example's sake , what they're going to say is they're going to go . Well , ari , you gave $100,000 beyond the $18,000 limit per year . So not $5 million , $4,900,000 . That's how much essentially is going to be taxed , because that $100,000 , we have to account for that .

So you can't just kind of slide by , try not to pay taxes on that and give money to your family as a cheat . So the point here is this annual gift exclusion . This is something per donor , per donee . So me and Alice fiancé let's assume we have a child , we can both both of us we can give 18,000 bucks . We can spoil this baby , give it $36,000 a year .

That is the most we can do . Okay , some States after tax , oh , some States , yes , they offer tax deductions for the current year If you contribute not every state , but some of them do . So check yours or get the flow charts and you can see it all . Hsa health savings account . That's number six .

This is a magical account that many of you guys do not utilize , and I know that because when I talk to you , whether it's on a live show or I'm doing an optimization call or it's a client they're like yeah , health stuff doesn't really come up for me , so I don't really think I need to do this . I go it's the best investment account there is .

You get to save taxes . Today , you get a deduction , it grows , you don't pay any taxes and when you take it out , you don't pay any taxes . So my client actually my child of a client said it really well they go is this like a combo account ? I'm like tell me more .

They're like well , it's like a traditional IRA because you get a deduction for it , but it's like a Roth IRA because you take it out and you don't pay taxes . I go exactly so , except you can only use it for health care expenses .

So the thing is this health savings account , if you're making a lot of money , it's a very good account If you're over age , so $4,150 if you're single is the limit , $8,300 for family . You can do $1,000 more if you're over age 55 . And remember , these will , dollar for dollar , reduce your income . So definitely want to do this .

Fsa I like to skip over this , but some clients use it . It's got a flexible spending account . Hsa is better . So I tell clients mainly ignore this . And then last one that I want to go over here , which is number eight , is can we be really intentional with the way we take deduction ?

So if you're in a really high income year right now and you're a business owner , or you just have a ton of income and you're trying to save on taxes , this might be the year . If you're like , hey , should I get solar ? Or I'm going to , I want to pair up .

Like , for example , I'm going to get a surgery , I'm not going to because I don't need to , but if you needed to , you might be like , hey , maybe I get it before the end of the year and I end up itemizing . And if I itemize , it's going to save me more . Maybe put more money towards your mortgage and pay off a little bit more interest .

Now , there's limits to all of these things , but you want to make sure we're being strategic with tax planning and pairing contributions in a timely fashion . So biggest thing here , obviously , is make sure with retirement planning , you are optimizing .

But here's the mistake I see people make , and this is what I'll leave you with the mistake I see people do or not do . The mistake I see people make is they get so into this like , yes , I'm going to save on taxes with this strategy . I'm doing the 401k , I'm doing the HSA , I'm doing charitable giving , I'm adding to a 529 .

I'm like , hey , is there any money left over for you ? Because , yeah , you just optimize all the taxes but like , now , all of a sudden , didn't get you closer to an early retirement .

So when people are like , why am I making so much money but I don't feel wealthy , I'm like , well , you're either over saving for retirement , you're over spending , or you're not deploying your money . Well , in reality , you should be paying yourself so that you can retire early if you want to .

And if you're like me , who has no desire to ever retire , but you're like , hey , I just want to financially feel , if anything ever changes , I don't have to keep working . Well , that's the power of good planning is , you don't have to as long as you're set up well . So these are the strategies .

If you want access to all the checklists and flow charts , like I mentioned three times already , go to the Academy . You can see it all there . If you want the software , if you want to work with our team one-on-one , you can go ahead and do that . You can see in the description where to apply . And other than that , I'll see you guys next time .

Thank and other than that , I'll see you all for listening . Please do rate it , review it and share it with someone who you think would benefit from this information . If there's anyone out there that you know , I certainly appreciate it and I will see you all each week . Hey guys , it's me again . Please be smart about this .

Nothing in this podcast should be construed as financial , tax or legal advice . Consult with your tax preparer or financial advisor before taking any action . This podcast is for informational purposes only .