December 31st isn't just a deadline. It's a decision point. The tax strategies you implement in the final weeks of the year will echo through your 2026 financial picture and beyond. Whether you're managing personal investments or running a business, the moves you make now create flexibility you won't have come January.
At ODC, we encourage clients to see year-end planning as a strategic opportunity rather than another item on your to-do list. This is your chance to fine-tune your approach, capture available benefits, and position yourself for a stronger financial year ahead.
What's Really at Stake
Year-end planning is about control. When you review your financial position before December 31st, you're able to make intentional decisions about income timing, deductions, investments, and operational structure. If you wait until tax season, you're simply reporting what already happened. But if you act now, you're actively shaping your tax outcome while aligning immediate decisions with longer-term goals.
This window closes quickly, but the impact compounds over time. A contribution made in December can grow tax-deferred for decades. A deduction claimed this year might free up capital for next year's opportunities. A business expense accelerated into this quarter could improve your cash flow planning for Q1. These are financial positioning decisions that affect how much flexibility you'll have when opportunities or challenges surface.
For Individuals: Turning Tax Planning Into Financial Advantage
Year-end offers several strategic opportunities to improve your overall tax efficiency while supporting your broader financial goals. The right approach balances current savings with long-term flexibility, ensuring you're not sacrificing future growth for today's deduction. Here are some of the most impactful strategies to consider:
- Tax-loss harvesting – If you're holding securities that have declined in value, selling them before year-end can help offset capital gains and reduce your current tax burden while keeping your portfolio positioned for recovery. This strategy works particularly well when you're rebalancing anyway, allowing you to harvest losses efficiently and improve your after-tax returns.
- Retirement account contributions – Maximizing contributions to Roth accounts or traditional retirement plans before December 31st can create meaningful long-term savings flexibility. Converting portions of traditional retirement accounts to Roth accounts during years when your income is temporarily lower can also set you up for tax-free growth over decades. These decisions compound, which is why timing matters.
- Strategic charitable giving – Donor Advised Funds let you contribute now (capturing this year's deduction) while distributing to charities over time, giving you both immediate tax benefits and ongoing flexibility in your giving. You can contribute cash (deductible up to 60% of AGI) or donate appreciated assets (up to 30% of AGI), letting them grow tax-free within the fund.
- Real estate and alternative investments – For certain investors, tools like Delaware Statutory Trusts and Qualified Opportunity Funds (QOFs) can defer capital gains while diversifying your portfolio and potentially aligning with long-term income goals. QOFs offer federal tax deferral on capital gains from the sale of stock, real estate, or business equity when invested by the end of 2026, with the deferral continuing until April 2027.
Consider how one of our clients approached this last year. They were sitting on significant capital gains from a property sale and faced a substantial tax bill. By strategically investing a portion of proceeds into a QOF and pairing that with loss harvesting in their investment portfolio, they deferred $200,000 in gains to 2025 while improving their long-term portfolio diversification. The time we spent in November and December reviewing options gave them choices they wouldn't have had in April.
For Businesses: Closing the Year With Confidence
Business owners face different considerations, but the same principle applies: acting before year-end gives you control over your tax position and operational trajectory. Here are the key opportunities to evaluate:
- Qualified Business Income (QBI) deduction optimization – For pass-through entities, strategic planning around W2 wages and qualified property can maximize this valuable 20% deduction, especially as you approach income phase-out thresholds. Careful year-end positioning of income and expenses can make the difference between capturing the full deduction or seeing it reduced or eliminated.
- Equipment purchases and capital expenditures – If you've been considering technology upgrades or other capital investments, Section 179 expensing and bonus depreciation allow you to deduct qualifying expenses immediately rather than depreciating them over years. This can be particularly valuable in profitable years when you want to reduce taxable income while investing in assets that support growth. The question isn't only "Can we afford this?" but "Does this purchase position us well for 2026 while providing current-year tax benefits?"
- Pass-Through Entity (PTE) tax elections – For businesses in states with income tax, PTE elections can provide immediate deductions that pass through to owners, potentially yielding significant tax benefits. For 2025, the State and Local Taxes (SALT) deduction cap is temporarily $40,000 but phases out for higher Modified Adjusted Gross Income (MAGI), eventually returning to the $10,000 limit. Evaluating a PTE election in the context of your income, ownership structure, and state taxes can help you capture available benefits before year-end.
- Retirement plan contributions – Maximizing 401(k) contributions or exploring options like SEP IRAs or defined benefit plans can significantly reduce your taxable income while building long-term wealth. For profitable businesses, these contributions often represent one of the most tax-efficient ways to retain earnings while securing your financial future.
- Entity structure review – As your revenue grows or your operations evolve, the entity structure that made sense at startup may no longer be optimal. Year-end is an ideal time to evaluate whether an S-corporation election, partnership restructuring, or other change could improve your tax efficiency going forward. These decisions require lead time to implement properly, which is why we start these conversations in Q4 rather than waiting until spring.
The Real Value of Planning Ahead
The difference between reactive and proactive year-end planning often shows up months later. Clients who engage in Q4 reviews consistently report greater peace of mind during tax season because they know the decisions they made were intentional. There are no surprises, no regrets about missed opportunities, and no scrambling to understand what happened.
More importantly, proactive planning creates financial margin. When you've optimized your tax position, you free up resources for other priorities: reinvesting in your business, strengthening your emergency reserves, funding education, or pursuing opportunities that emerge unexpectedly. Tax planning isn't just about minimizing what you owe. It's about maximizing what you can do with what you keep.
Partnering with ODC for Smarter Planning
Year-end planning isn't one-size-fits-all. Your income sources, business structure, family situation, and long-term goals all shape which strategies make sense for you. Our team is conducting year-end planning reviews through mid-December, and we'd welcome the chance to walk through your specific circumstances.
Whether you're an individual looking to optimize your personal finances or a business owner positioning for growth, these final weeks of 2025 represent a genuine opportunity to strengthen your financial foundation for 2026. Let's make sure you're taking full advantage of it.
Join Our Upcoming Year-End Planning Webinars
To help you put these ideas into action, ODC is hosting two complimentary webinars:
November 13: End-of-Year Planning for Individuals: Portfolio, Income & Estate Strategies. Presented by Katie Tompkins, CPA.Register Now.
November 20: End-of-Year Planning for Business Owners: Key Tax Updates, Capital Gains & 2025 Readiness. Presented by Aaron Dawson, CPA, Justin Jenks, CPA, and Sam Christensen, CPA. Register Now.
Contact us today to schedule your year-end planning conversation or register for our upcoming webinars.
