5 minute read

The new 2025 tax law is in effect, and with the year winding down, many households and business owners are asking the same question: what do I need to do before December 31? The answer depends on your situation, but the good news is that there are a few clear, high-impact steps most people can take right now.

Unlike our earlier deep dive on the top five money moves, this piece takes a broader view. Think of it as a year-end tune-up: a way to align your finances with the new rules, whether you’re managing a household budget, running a business, or coordinating a complex estate plan.

What Changed This Year

Congress made permanent the 2017 tax brackets and standard deductions, so the rates you’ve been working with aren’t going away. But there are some notable twists worth highlighting:

• The SALT deduction was expanded for 2025. For some households, this means itemizing may make sense again, so managing your income threshold to maximize this deduction is key.
• Certain types of income, like tips and overtime, may now qualify for special above-the-line treatment, though eligibility depends on income levels.
• If you’re 65 or older, the new senior-focused deduction could add meaningful savings.
• And on the estate side, the transfer-tax exemption rose sharply, prompting many families to revisit gifting strategies.

Why Everyday Households Should Revisit Withholding

For most families, the first step is simple: re-project your taxes for 2025. Even if your income hasn’t changed, new thresholds and deductions could shift your refund or balance due. Adjusting your paycheck withholding or estimated payments now can save an April surprise.

Another key decision is whether you’ll take the standard deduction or itemize. With the expanded SALT cap in play for this year, it’s worth running the numbers. If itemizing benefits you, prepaying property taxes or timing charitable contributions before year-end could tip the balance in your favor.

Finally, don’t forget the basics: maximize contributions to your retirement accounts and HSAs where eligible. These strategies remain reliable ways to lower your taxable income and build long-term security.

Business Owners: Make Expense Timing Work for You

If you own a business, year-end planning takes on extra weight. Timing income and expenses has always been a lever, but renewed bonus-depreciation rules and expensing provisions make this especially relevant in 2025. Thoughtful timing can smooth cash flow and manage taxable income more effectively.

This is also the moment to confirm your retirement plan funding. Whether you use a SEP, Solo-K, or traditional 401(k), contributions made before year-end can reduce taxable income and support long-term savings goals.

Clean financial records matter too. They’re essential not only for tax reporting but also for financing or positioning your business for sale. And because state rules don’t always match federal law, check how your state treats the new provisions before finalizing big moves.

For Families with More Complex Estates, Gifting Just Got More Interesting

The new law also reshapes planning for wealthier households. With brackets locked in, this is the year to test whether a Roth conversion makes sense. Converting now could reduce future taxable income, but it requires careful analysis to avoid unintended consequences.

Trust planning also deserves attention. Deciding whether to distribute income or retain it in trust can shift tax burdens and alter how wealth flows to beneficiaries. Higher exemptions open the door to expanded gifting strategies – from annual exclusion gifts to larger transfers of appreciating assets.

For families with multi-generational wealth, this is the year to coordinate. Bringing together your advisor, CPA, and attorney for a joint review before December 31 can help align estate plans, tax planning, and family goals under the new rules.

Looking Ahead

At First Foundation Advisors, we’re monitoring three areas closely: interest-rate trends, forthcoming IRS guidance on new deduction mechanics, and the political landscape heading into 2026. Each could shape future planning, but none should stop you from acting now.

Next Step

The common thread across all households is urgency. The window to act is closing, and a short planning session can mean the difference between leaving money on the table and making the most of the new law. Schedule your year-end planning session today.