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Have you considered any financial plans to make before 2026? Do you know the gift and retirement contribution limits for 2025? This article delves into strategies for making the most of 2025 before it’s gone. Items include retirement contributions, gifting and inheritance.
As the year-end holidays approach, there are many plans to be made with family and friends. Along with the holiday cheer, there are financial plans to consider as well. Review these financial opportunities and deadlines before 2026 arrives.
As we count our many blessings and share time with our loved ones, we can express our thanks through giving to others. Donate to your favorite charity before the end of the year. In general, to be tax deductible, the gift must be made to a qualifying organization and made during the 2025 calendar year.
Cash and assets may be gifted to children, relatives or even friends, to take advantage of the annual gift tax exclusion. Any individual may gift up to $19,000 this year to as many individuals as he or she desires – and a couple may jointly gift up to $38,000. Whether gifting singly or jointly, there is a lot of leeway before reaching the current $13.99 million lifetime exemption ($27.98 million for couples).
Grandparents, aunts, uncles and parents too, can fund 529 college saving plans this way, but keep in mind that December 31st is the 529 funding deadline for 2025.
Most employers offer a 401(k) or 403(b) plan, and contributions can be made until December 31st to boost annual contributions.
Did you inherit an IRA? For anyone inheriting an IRA, the rules vary based on whether the beneficiary is a spouse, a minor, and whether the decedent had started taking distributions. Check with your financial professional on the rules for each situation. In some cases, a distribution may need to be taken by December 31st.
Business owners’ retirement plans. Those who are self-employed can save for the future by using a self-directed retirement plan, such as a Simplified Employee Pension (SEP) plan or a one-person 401(k), the so-called Solo (k).
Contributions to SEPs and Solo (k) s are tax-deductible. December 31st is the deadline to set one up, however, contributions can be made as late as April 15th of next year (or mid-October with a federal extension).
In approaching the end of 2025, there are many rules, deadlines and contribution limits to consider. In thinking about your year-end financial planning, talk to a trusted financial professional to determine what is best for your unique situation.
