2025 Year-End Tax Planning: Key Strategies for Individuals, Families, and Business Owners

Effective year-end tax planning remains one of the most important ways to create clarity around your financial decisions and position yourself well for the coming year. As 2025 draws to a close, new legislation, updated tax thresholds, and shifting planning opportunities make this an especially important moment for individuals, families, and business owners to review their strategies.

The BMSS 2025 Year-End Tax Planning Letter highlights key updates across income tax, retirement tax planning, charitable giving strategies, business tax planning, estate and gift planning, and state and local tax (SALT) considerations.

Below is a high-level overview of the main themes covered in the full resource.

1. Updated Tax Brackets & Income Planning Strategies

The letter includes updated 2025 and 2026 federal tax brackets and discusses practical ways to align your income with those thresholds. Planning ideas include:

• Considering whether to accelerate or defer income
• Reviewing capital gain recognition and loss harvesting
• Confirming that estimated tax payments and withholdings are sufficient to avoid penalties

These strategies are especially important for higher-income taxpayers and business owners who may see more volatility from year to year.

2. Retirement Tax Planning: Contributions, RMDs & Roth Strategies

Retirement planning continues to be a core part of tax planning:

• Updated 401(k), Roth 401(k), 403(b), IRA, SEP, and Solo 401(k) contribution limits
• Catch-up contribution rules that shift to Roth for certain higher earners beginning in 2026
• Guidance on Required Minimum Distributions (RMDs) and the changing start ages
• Situations where a Roth conversion may be worth considering, depending on current vs. future tax brackets

For many clients, aligning contribution decisions and distribution strategies with their broader financial plan can create meaningful long-term tax savings.

3. Charitable Giving Strategies Under the OBBBA

The One Big Beautiful Bill Act introduces new charitable deduction rules beginning in 2026, including AGI floors and different treatment for standard deduction filers. As a result, some households may benefit from “bunching” charitable contributions into 2025.

The letter outlines several tools:

• Donor-advised funds (DAFs) for front-loading gifts while granting over time
• Gifting appreciated securities to avoid capital gains and maximize deductions
• Qualified Charitable Distributions (QCDs) from IRAs (up to $108,000 in 2025), which can satisfy RMDs and reduce taxable income

These strategies can help you support the causes you care about while managing your long-term tax picture.

4. Estate & Gift Tax Planning: Updated Exclusion Amounts

Estate and gift planning remains a central focus for families thinking beyond a single tax year. The letter highlights that the estate, gift, and generation-skipping transfer (GST) tax exclusion is $13.99 million per person in 2025, with the OBBBA making higher exclusion levels permanent and indexed for inflation.

Topics covered include:

• Using the annual gift tax exclusion (e.g., gifts to children, grandchildren, or others)
• Coordinating trust distributions to manage overall family tax exposure
• Reviewing beneficiary designations, wills, and trusts for alignment
• Understanding portability of a deceased spouse’s unused exclusion

The aim is not only tax minimization, but also a clear, intentional transfer of your wealth and values.

5. Business Tax Planning Opportunities for 2025

For business owners, the letter includes several important 2025 tax strategies for businesses:

• Permanent 100% bonus depreciation for qualifying property placed in service after January 19, 2025
• Enhanced Section 179 expensing limits and tangible property safe harbor rules
• Updated rules for R&D expense deductibility and credits
• Limitations on business interest deductions under IRC §163(j)
• Planning around worthless stock, bad debts, and inventory methods
• New 100% expensing for certain production property used in manufacturing and refining

These provisions can materially impact cash flow, capital investment decisions, and long-term growth plans.

6. SALT & Multistate Planning: Nexus, PTET Elections & Compliance

For taxpayers with activity in more than one state, state and local tax planning is increasingly important. The letter addresses:

• Evaluating where your business has nexus under post-Wayfair rules
• Ensuring that revenue sourcing (services vs. products) is handled correctly
• Considering pass-through entity tax (PTET) elections where available
• Reviewing sales and use tax registrations and filings
• Exploring options to address historical exposure if prior obligations are discovered

A thoughtful SALT strategy can reduce surprises and improve both compliance and after-tax outcomes—especially during business transitions or liquidity events.

Next Steps: Applying These 2025 Tax Strategies to Your Situation

The full BMSS 2025 Year-End Tax Planning Letter provides additional detail, thresholds, and examples across these and other areas. It is designed as an educational resource to help you see the landscape more clearly so you can make decisions with greater confidence.

Download the 2025 Year-End Tax Planning Letter (PDF)

If you would like to discuss how these strategies might apply to your specific situation, or how they intersect with your broader financial, business, or estate planning, we would be honored to help.

Important Disclosure:
This material is for informational and educational purposes only and is not intended as specific tax, legal, or investment advice. Tax laws and regulations are subject to change, and their application can vary based on individual circumstances. Please consult with your tax advisor, legal counsel, and/or financial professional before making any decisions based on this information.