Smart Year-End Tax Moves for High-Net-Worth Individuals
As this year winds down, individuals with significant wealth face not only the usual tax-planning considerations but also new rules under OBBBA that may affect charitable giving, itemized deductions, and gifting strategies. A thoughtful review now can yield meaningful benefits.
This post includes tips for:
Investment Portfolio
Retirement Contributions
Charitable Giving Strategies
Estate, Gift, and Wealth-transfer Planning
Pass-through Income Planning
Bonus Depreciation
Health, Family, and Lifestyle Planning
Next Steps Before December 31
Review Your Investment Portfolio
Market fluctuations throughout the year may have shifted your asset allocation or created opportunities for tax optimization. Well-timed investment moves can reduce current-year taxes while supporting long-term goals. Consider:
Tax-loss harvesting to offset capital gains,
Rebalancing portfolios to maintain target asset allocation,
Reviewing exposure to alternative investments, including real estate and private equity, and/or
Coordinating with your advisor to ensure gains, losses, and income align with your long-term plan.
Optimize Retirement Contributions
Maximizing tax-advantaged savings is essential for high earners. These strategies can help reduce taxable income while boosting long-term wealth. Key actions include:
Max out contributions to 401(k), IRA, or defined benefit plans.
Consider cash balance plans for additional pre-tax savings.
Evaluate back-door Roth conversion opportunities.
Review required minimum distributions (RMDs) and qualified charitable distributions if applicable.
DOWNLOAD THE 2025 YEAR-END TAX CHECKLISTS FOR BUSINESSES AND INDIVIDUALS
Charitable Giving Strategies: Updated for OBBBA
Charitable giving remains a core strategy for high-net-worth tax planning, but the new legislation introduces important limitations and thresholds that you need to factor in.
Under OBBBA, for individuals who itemize their deductions and are in the top marginal tax bracket, the tax benefit from itemized deductions (including charitable contributions) is limited. Specifically, the deduction benefit is reduced to about 35 cents for each dollar deducted for the highest-bracket taxpayers.
Practical steps before year-end:
If you’re in a high tax bracket and plan a large charitable gift, consider executing the gift this calendar year rather than delaying it to next year because future deduction limits may reduce the benefit.
Carefully evaluate the type of gift (cash vs. appreciated securities) and the recipient entity (public charity vs. donor-advised fund or private foundation), given the upcoming changes.
Coordinate with your financial advisor and tax team to ensure the contribution timing, documentation, and entity eligibility align with these evolving rules.
Estate, Gift & Wealth-Transfer Planning
Given OBBBA’s impact, now is a good time to revisit your transfer strategies. Although the estate and gift tax exemption remains historically high, you should still consider how your gifting fits within your broader wealth plan, and whether accelerating gifts makes sense.
Business-Owner / Pass-Through Income Planning
If you own a business or have pass-through income, year-end planning can deliver additional savings. Strategic timing and expert guidance can result in significant tax savings. Consider:
Accelerating or deferring income based on projected tax brackets,
Maximizing Section 179 and bonus depreciation where applicable,
Reviewing compensation structures, profit distributions, and entity-level tax elections, as well as
Ensuring accurate bookkeeping to support deductions.
Maximize 100% Bonus Depreciation
Recent legislation made the 100 percent bonus depreciation amount permanent, offering a significant planning advantage for business owners and investors. This rule allows you to deduct the full cost of eligible assets in the year they are placed in service rather than spreading deductions over time.
This incentive can significantly improve cash flow and make it easier to justify purchases you already plan to make. It is not just for large corporations. Privately owned companies, franchises, medical practices, and real estate operators also benefit from it.
Remember, the asset must be placed in service before year-end. Delivery and operational readiness matter more than the purchase date.
Eligible investments may include:
Business aircraft,
Commercial vehicles and fleet updates,
Machinery and equipment,
Technology and software, and
Retail equipment and facility upgrades.
Why it matters now
You receive an immediate tax deduction instead of waiting years.
It supports strategic expansion or modernization.
Large purchases can meaningfully reduce taxable income.
Planning note: Consider coordinating bonus depreciation with income timing, charitable gifts, and retirement strategies to maximize tax efficiency.
Health, Family & Lifestyle Planning
Aligning personal and family financial decisions ensures a complete tax strategy. A few easy-to-overlook areas often lead to benefits for high-income families:
Max out Health Savings Account (HSA) contributions,
Fund 529 plans for education and potential state tax benefits,
Review family office structures, if applicable, and
Evaluate insurance and risk-management coverage.
Next Steps Before December 31
Here’s a focused checklist tailored for high-net-worth clients under the new legislative environment:
Meet with your CPA/tax advisor and wealth team to run updated projections: factor in the deduction limitations under OBBBA and assess whether to accelerate or defer contributions or income.
Finalize charitable gifts you intend to make this year. Document the gifts properly (especially if giving appreciated assets), pick the correct type of charity, and ensure timing aligns with your intent.
Review investment gains/losses, and work with your advisor to decide whether harvesting losses or recognizing gains makes sense given your tax bracket and the deduction-limitation changes.
Evaluate estate/gift strategies under the current exemption landscape and the legislative changes on the horizon. Consider whether gifting now is better than later.
Confirm retirement plan and executive compensation strategies (if applicable) for business owners or executives and align business decisions with the new tax rules.
Organize tax records and supporting documentation, especially charitable receipts, contribution letters, and trust/estate planning updates.
Discuss business entity or pass-through considerations: If you have business income, consider how the pass-through deduction, entity structure, and income timing interact with the legislative changes.
Tailored Advice
For individuals with substantial wealth and complex income streams, the evolving tax landscape makes tailored advice more important than ever. At LMJ CPAs, our team specializes in working with high-net-worth individuals and families to:
Navigate the new limitations under OBBBA,
Structure charitable giving and philanthropic strategies to reflect the new rules,
Coordinate investment, business, estate, and retirement-planning decisions within the tax framework, and
Prepare year-end action plans and execute with precision.
Contact us to secure time before the year and the window for optimum timing closes.