As we approach year-end there’s still time to take a few steps that may save you taxes this year and next.
Review Your Investment Portfolios
Be sure to review your investment portfolios with your advisers to make sure they are taking advantage of any losses that would offset your 2025 capital gains (“loss harvesting”). You can wait 31 days and buy back the stocks you sold if you really want them in your portfolio.
Charitable Contributions
The recent “OBBB” Act signed into law in July makes major changes to the treatment of charitable contributions beginning in 2026. It may behoove you to accelerate your charitable giving into 2025. Keep in mind that gifts of appreciated securities are deductible at their fair market value, so you may want to donate investments in which you have the lowest cost basis and would have the largest taxable gain if you were to sell them.
529 Plan
Consider funding a 529 plan for future college costs of a child or grandchild. You and your spouse can each contribute up to $19,000 per child in 2025 without filing a gift tax return, and if you are concerned about estate taxes you can give up to $95,000 this year and treat it as though it is spread over the next five years at $19,000 per year. You may be able to contribute appreciated stocks to a donor-advised fund and make annual 529 contributions from it. Consult with your investment adviser for clarification.
Many states provide for a tax deduction for amounts contributed to a 529 plan; Ohio plans qualify for an annual $4,000 state tax deduction per child.
Spousal Lifetime Access Trusts (SLATs)
Speaking of estate planning, ask your attorney about Spousal Lifetime Access Trusts (SLATs) and whether they might benefit you. This planning technique is for individuals who expect to have taxable estates in excess of the $15 million exemption equivalent that will become effective in 2026. Regardless of the size of your estate make sure you have powers of attorney for health care and financial purposes.
Trump Accounts for Under 18s
Beginning in July of 2026, you can open Trump Accounts for children under 18 and contribute up to $5,000 per year. Once the child turns 18 the account essentially becomes an after-tax IRA like a Roth, meaning future amounts withdrawn will not be taxed. The money has to be invested in certain stock market index funds. This was just announced on December 2nd and more details will be forthcoming.
In addition, the federal government will contribute $1,000 to a Trump Account opened for any child born after January 1st, 2025. This opportunity is scheduled to expire after 2028.
Please let us know if you have more questions.