Greetings!,

With the end of December fast approaching, have you done any year-end planning?

For many of us, the items we used to be concerned about getting done before December 31 are not as important as it used to be. Most of us use the standardized deduction, so there is not the need to itemize things like charitable deductions.

However, what about other income or deductable items? Can you contribute more to your 401(k) or 403(b)? Can you add funds to your Health Savings Account (HSA) if you have one?

IRAs actually do not need to be funded for the current tax year until April 15, 2026, or when you file your taxes, whichever comes first.

If you are over the age of 73, have you taken all of your Required Minimum Distributions (RMDs) from your qualified investments? What about using any of these as direct charitable gifts? Doing this may allow you to not recognize these distributions as income and avoid any taxes on them.

Also, if you are retired, or receive subsidized healthcare premiums, controlling your income can impact your health insurance costs. Remember that Medicare Part B premiums are determined based on your taxable income. Government health insurance subsidies are also income-based.

If your income is locked in and no changes are needed, maybe it's time to plan for 2026. There are new limits for the following year you need to be aware of:

IRA limits are increased to $7,500 per person for those who qualify. The catch-up amount will also increase to $1,100.

The 401(k) contribution will also increase to $24,500, up from $23,000 for this year. The catch-up will be $8,000, with special provisions if you are aged 60-63.

In addition, the FICA wage limit will increase from $176,100 to $184,500 (the limit at which you can stop paying FICA taxes).

I know these are a lot of numbers, and some of the will not impact you. However, if you have questions, or want to plan for 2026, please give us a call. We are eager to provide service in this area.

As always, thanks for reading.



Bernie & Chad