By taking a proactive approach before December 31, James and Helen achieve multiple goals:
- They lock in a valuable charitable deduction under 2025 rules.
- They reduce their future tax exposure through strategic Roth conversions.
- They advance their philanthropic mission in a way that will sustain their giving for years.
For James and Helen, thoughtful year-end planning isn’t just about optimizing taxes—it’s about aligning their wealth with their values. Their case underscores how integrating charitable giving into a broader financial strategy as part of a year-end plan can turn tax changes into long-term opportunities.]
Broader impacts of the OBBB across the tax landscape
Beyond these headline areas, the OBBB’s influence extends to several other aspects of year-end financial planning. Changes to the state and local tax (SALT) deduction under the OBBA make it an important area to revisit as part of year-end planning. The new rules raise the deduction cap for taxpayers from $10,000 to $40,000, meaning the benefit of itemizing will now vary more than ever based on your income level, filing status and where you live. For households in high-tax states, these adjustments could meaningfully shift the value of deductible expenses such as property taxes, mortgage interest and charitable contributions.
Looking elsewhere, Roth conversions continue to represent a key planning lever, since they can provide tax-free income in retirement, eliminate required minimum distributions (RMDs), offer tax diversification and allow for tax-free inheritances for beneficiaries. The absence of new restrictions or surtaxes means that conversions remain an effective tool for those looking to manage future tax exposure in retirement.
Capital gains treatment also remains largely consistent for now—but with possible changes on the horizon, it’s important to be intentional about realizing gains or losses this year. “If you've got a big gain this year and you want to offset it with a loss, you can't wait till January to do that,” Steffen says.
Another strategy to mitigate the cost of capital gains taxes is to take advantage of Opportunity Zone Funds, vehicles that allow you to defer and potentially reduce capital gains taxes while investing in economically distressed communities. Starting in the second half of 2026, when you recognize a capital gain, you have 180 days to roll it into an Opportunity Zone Fund. For example, say you’re planning on selling a considerable amount of company stock. In this case, you might want to push that action into the second half of 2026 so you can realize the benefits of an Opportunity Zone Fund in early 2027.
Other areas worth close attention include qualified business income deductions, child tax credits and education-related provisions, all of which have been adjusted in ways that can shift year-end strategies for many households.
Taking a holistic view
As tempting as it may be to address each of these topics in isolation, their interactions can be just as important as their individual effects. A change in one area—say, realizing a capital gain—can have an effect on your income bracket, charitable deduction eligibility or estate planning thresholds. And, as always, current tax laws affect different people differently, depending on their specific life situation. If you’ve experienced a major shift in your life—for example, a change in marital status or state of residency—that adds yet another variable to the equation.
That’s why it’s essential to view this year’s updates as part of a broader, integrated financial strategy. Working closely with your advisor now can help ensure that your plan reflects the evolving tax environment, positioning you to take advantage of today’s opportunities while staying prepared for tomorrow’s rules. Your advisor can help you navigate not only changes introduced by the OBBB, but new considerations outside of the bill, including changes to the way Social Security benefits are calculated for retirees, the introduction of “super” catch-up retirement account contributions for employees over 50 and new rules around inherited retirement accounts.
“When you decide to recognize a capital gain, do a Roth conversion or make a gift to charity, all of these things come with a tax implication,” Steffen says. “What’s more, every decision causes a ripple effect through your tax return. You recognize a bit of income over here and all of a sudden, you've lost this deduction or this credit over here that you hadn't anticipated. Planning for that ripple effect through your return has always been important. It's even more important this year.”
