The Practical Planner – Everything You Need to Think About Tax Planning Before the Year's End

Podcast: The Practical Planner
Host: Thomas Kopelman (Head of Community, wealth.com)
Guest Co-host: Dave Haughton
Release Date: October 14, 2025

Episode Overview

This episode is dedicated to a deep-dive on year-end tax planning strategies for advisors. Thomas and Dave unpack both foundational and nuanced moves that advisors should consider for clients in Q4, covering not just investments and retirement accounts, but also giving strategies, business owner tactics, and crucial compliance-related reminders to avoid last-minute scrambles. The discussion is rich in practical advice, checklists, and expert insight into advisor workflows.

Key Discussion Points & Insights

1. The Value of a Structured Year-End Process

• [00:15] Thomas: Stresses the importance of advisors having a standardized, repeatable process for annual client meetings and reviews:
  • “You need to have a set process... What I’m doing with all my clients at year end is end of year tax planning."
  • Recommends alternating focus years between estate planning, insurances, and tax planning.

2. Charitable Giving & Donor-Advised Funds (DAFs)

• [01:14] Dave: Charitable gifts—especially into DAFs—are a typical scramble at year-end. It’s vital to manage timing:
  • “Give yourself enough leeway to not be doing this the last day of the year... operationally, you’re toeing the line of whether it can even get processed.”
• [02:15] Thomas: Custodians are extremely busy late December:
  • “You’re not trying to do this on December 28th.”

3. Roth Conversions & Tax Projections

• [02:28] Thomas: Urges advisors to create an updated tax projection before making recommendations:
  • Cautionary tale: Advisors making Roth conversion recommendations without full clarity on client income risk severe planning mistakes.
  • "You should be digging into the income sources... That’s a way you’re going to get yourself in trouble really quick as an advisor.”
• Importance for business owners: Calculate Q4 payments based on actuals, update clients on projected April tax bills.

4. Annual Gifting and Strategic Gift Timing

• [04:05] Dave: For estate planning, annual exclusion gifting ($19,000 per year per recipient for 2025) can be split across years:
  • “You can always do a half in December and half in January... that way you can stay under those thresholds without needing extra tax filings.”

5. Retirement Contributions and Catch-Up

• [05:04] Thomas: Ensure all qualified plans (401k, 403b, 457, HSA, mega backdoor Roth) are maximized:
  • “A lot of times our clients... have their percentage too low or they’ve already maxed it out and we can funnel more into the mega backdoor Roth.”

6. Tax Loss and Tax Gain Harvesting

• [06:02] Dave: End-of-year is crucial for tax loss harvesting; pay close attention to wash sale rules.
  • “It’s really critical to be very intentional and understand exactly where your AGI is at... and to make sure again that you’re giving yourself enough time to get that done.”
• [06:52] Thomas: Tax gain harvesting is often overlooked, especially for clients with unusually low-income years:
  • “You have this ability to potentially tax gain harvest... using potentially a 0% capital gains bracket.”

7. Flexible Spending Accounts & Dependent Care FSAs

• [07:36] Thomas: Remind clients to fully use “use-it-or-lose-it” accounts before year-end to avoid forfeiture:
  • “This is why we see people have surgeries and buy glasses or do all these things at year end.”

8. Equity Compensation Strategies (ISOs, NSOs, AMT)

• [08:48] Thomas: Year-end is the time to strategically exercise incentive stock options (ISOs), Non-qualified stock options (NSOs), and plan around the alternative minimum tax (AMT):
  • “Year end’s a really good time to say, OK, I have these ISOs. I have the ability to exercise, let’s say, $30,000 of spread without triggering AMT. Well, let’s for sure get that done this year...”

9. Real Estate Cost Segregation & Bonus Depreciation

• [09:26] Thomas: For property owners, consider cost segregation studies and bonus depreciation, referencing recent favorable tax laws for accelerated depreciation.

10. 529 Contributions & State-Specific Credits

• [09:45] Thomas: Contributions are often eligible for deductions or credits:
  • Example: “Indiana, we get a $1500 tax credit if you put in $7500.”

11. Business Owner-Specific Moves

• [09:56] Thomas:
  • Max solo 401(k) employee contributions (deadlines may differ from tax year).
  • Roth IRAs, backdoor Roths funded.
  • Maximize Qualified Business Income Deduction (QBID)—timing salary and profit withdrawals.
  • Early pay Pass-Through Entity Tax (PTET) payments when advantageous.
  • Defer or accelerate income/expenses strategically.

12. Trust Distributions and the 65-Day Rule

• [10:59] Dave: End-of-year trust planning is critical to avoiding high trust tax rates; consider distributing income to beneficiaries:
  • “If you can get that income out... then you can K-1 the beneficiary and the beneficiary will be liable... They don’t necessarily have to do it by December 31st... there’s the 65-day rule.”

13. Fine-Tuning Withholding & Bonus Payments for S Corps

• [11:05] Thomas: Year-end bonuses and withholdings can help business owners hit safe harbor tax numbers and optimize deductions.

14. Qualified Charitable Distributions (QCDs)

• [11:38] Dave: For clients over age 70½:
  • “Qualified charitable distributions... can make their RMD tax-free up to $100,000. So it’s a really powerful tool.”

15. Evaluating Entity Elections

• [12:09] Thomas: Fast-growing side businesses or evolving enterprises should revisit whether S Corp, partnership, or C Corp elections might be more beneficial in the upcoming year.

16. Checklist-Driven Advisor Planning

• [12:48] and [14:00] Thomas:
  • Advisors should tailor year-end checklists by client type (retirees, equity comp holders, business owners).
  • “The number one thing people look for in their advisor is tax planning... Build it into your process.”
• [14:00] Dave: Advises being proactive, not just cramming at year-end:
  • “If it’s just procrastination, you want to be careful... it’s better if you can do it earlier in the year.”

Notable Quotes & Memorable Moments

• On Procrastination:
  • Dave [14:00]: “If it’s just procrastination, you want to be careful of that and identify what you could do earlier... custodians are very busy at the end of the year. Clients are going on vacation, staff are going on vacation.”
• On Tax Projections:
  • Thomas [02:28]: “That’s really terrible tax planning. That’s a way that you’re going to get yourself in trouble really quick as an advisor.”
• On Checklist Mentality:
  • Thomas [12:55]: “This is like more of a checklist... Know your niche, what are the things that apply to them.”
• On Advisors' Value:
  • Thomas [13:56]: “The number one thing people look for in their advisor is tax planning. So build it into your process. It should be done at the end of the year, probably also early in the year, mid year... wrap it up at year end.”

Important Segment Timestamps

• [00:15] Structured advisor process for tax planning
• [01:14] Charitable giving and DAFs at year-end
• [02:28] Roth conversions and the need for up-to-date tax projections
• [04:05] Annual gifting mechanics and gift-splitting
• [05:04] Qualified plan contributions and catch-up
• [06:02] Tax loss and gain harvesting; wash sale rules
• [07:36] Flexible Spending Accounts and use-it-or-lose-it reminders
• [08:48] Equity comp: exercising options, AMT, and year-end windows
• [09:26] Real estate cost segregation and bonus depreciation
• [09:56] Business owner moves: QBID, PTET, accelerated deductions
• [10:59] Trust distributions and 65-day rule
• [11:38] Qualified charitable distributions
• [12:09] Entity election reviews for business owners
• [12:48] / [14:00] Checklist, niche planning, and advisor efficiency
• [14:00] Proactive versus reactive planning

Takeaways

• Early planning and process orientation are critical; don’t wait for the late-December rush.
• Update income and tax projections before any major tax moves.
• Leverage the full range of tax-favored accounts, business deductions, and charitable strategies.
• Be mindful of differences in deadlines (calendar vs. tax-year), and tailor moves for each client type.
• A detailed, niche-driven checklist makes advisors highly valuable to clients.

(End of summary. Skip to the above timestamps for in-depth discussion on any specific move.)