December 2025 Tax Tips & More
Tax Tips and More
December 2025
Upcoming dates:
Dec. 14 to Dec. 22
- Hanukkah
December 25
- Christmas Day
December 26
- Kwanzaa begins
January 15
- 4th Quarter Estimated Payments Due
Take final year-end actions
- Charitable contributions, other itemized deductions
- Capital gains/losses
- 401(k) contributions
- Dividend income
Plenty of new tax laws are set to land in 2026. This issue gives you an easy way to size them up, along with several practical moves to help make filing your 2025 tax return feel a whole lot easier.
Also read how year-end is a good time to handle a few financial tasks that can trim taxes and set you up for a steady start to the new year.
As always, should you have any questions, please call. And feel free to forward this information to someone who could use it!
Getting Ready For Taxes
This year AND next!
Plenty of tax changes are lining up as the calendar turns toward 2026, and knowing what’s coming can help you stay a step ahead. Before then, there’s also several moves to make filing your 2025 tax return as easy as possible.
Preparing to file your 2025 tax return
Gather records to support deductions for no tax on tips and no tax on overtime. Review the approved occupations for qualified tips and confirm the amount of this benefit you expect to claim in 2025. You will need proof of these claimed amounts. The same holds true for overtime pay. Employers are not required to issue W-2s or 1099s with this information in 2025, but they should provide you with the necessary confirmation of the dollar amounts. Compare these employer-provided amounts with your records to ensure they match prior to filing your tax return.
Look for new Form 1099-DA. If you own cryptocurrency or other digital assets, you may see this new form. Starting with the 2025 tax year, exchanges and brokers must report certain cryptocurrency and digital asset transactions, so you should track cost basis, sale dates, and wallets used to avoid mismatches or questions from the IRS.
1099-Ks may still be issued. You shouldn’t see a Form 1099-K from a payment processor such as PayPal or Venmo unless you have 200 or more transactions amounting in more than $20,000 in payments from the processor. But because of the many tax law changes in this area you may still receive a Form 1099-K in error. If you receive one, don’t throw it away! Include it with your other tax documents for proper reporting on your 2025 tax return.
Review IRA and HSA accounts. If you have an IRA or HSA account, you can make 2025 contributions up until either April 15, 2026 or the date you file your return, whichever is earlier.
What’s new in 2026
Above-the-line charitable contributions. You can deduct $1,000 of charitable contributions if single or $2,000 if filing jointly. This is available to you whether you use the standard deduction or itemize your deductions. There's also the introduction of a 0.5% floor for itemizing charitable contributions.
Itemized deduction phaseout is back. If you’re in the top 37% tax bracket, your itemized deductions could be reduced. This phaseout of deductions is being re-introduced beginning in 2026.
Mortgage insurance premiums can be reported as an itemized deduction.
Elimination of many energy credits. This includes the credit for purchasing electric vehicles after September 30, 2025 and the elimination of many residential energy efficient purchase credits at the end of 2025. So plan accordingly.
Your Year-End Tax & Financial Checklist
Year-end is more than just wrapping gifts and planning celebrations – it’s the last chance to make smart money moves that can reduce taxes and set the stage for a confident start to the new year. Use this checklist to help cover the essentials.
Check tax withholdings. Do a quick check to see if your paycheck withholdings will match your tax liability. If you had a big refund or owed a large amount last year, you can anticipate the same will happen this year. So if you have not already done so, adjust your W-4 so you’re closer to even. Then after filing your 2025 tax return, revisit your withholdings and make any fine tune adjustments for the 2026 tax year.
Max out tax-advantaged accounts. If you have a Health Savings Account, try to max out your annual contribution limits. This serves a dual purpose: paying for health expenses with pre-tax dollars PLUS any unspent contributions can be invested and used for future needs. Next take a look at retirement accounts like 401(k)s, 403(b)s, or IRAs before the year closes and contribute as much as possible up to the annual limits.
Use up FSAs. Flexible Spending Accounts often have use-it-or-lose-it rules. So check your balance and submit reimbursements for eligible medical or dependent care expenses. Some plans offer a short grace period or a limited carryover, so know your deadlines to avoid forfeiting money.
Plan for life changes. Marriage, divorce, a new child, or a change in employment can all alter your tax situation. Be prepared for any changes these life events may cause.
Clarify dependency claims. If family members provide or receive support, coordinate who will claim dependents on tax returns. This helps prevent IRS mismatches and ensures valuable credits like the Child Tax Credit go to the right filer.
Harvest investment losses (or gains). Review your portfolio to realize losses that can offset capital gains. If your income is low this year, you might even be able to harvest gains at a lower tax rate (maybe even 0%!). Be careful to avoid wash-sale rules.
Review your budget and spending. Look back over your expenses for 2025 to spot trends. Did you meet your savings goals? Were there surprise costs that could be planned for next time? Adjust your budget now while memories are fresh.
Check your emergency fund. Aim to keep three to six months of living expenses in a readily accessible account. If you’ve dipped into it this year, make a plan to replenish it, and review whether inflation or lifestyle changes mean you need a larger cushion.
Review insurance coverage. Health, life, home, and auto policies all deserve a fresh look. Confirm coverage levels still fit your needs, compare premiums, and check that beneficiaries are current.
Update beneficiaries and legal documents. Wills, trusts, and powers of attorney can become outdated quickly. Confirm that beneficiaries listed on retirement accounts and life insurance policies align with your estate plans.
Talk as a family. Finally, gather around the table for an open conversation about finances. Discuss goals, responsibilities, and plans for the coming year. Shared understanding builds financial strength, which is the best gift you can give each other before the year ends.
Ingredients of a Successful Business Partnership
Like a bundle of sticks, good business partners support each other and are less likely to crack under strain together than on their own. In fact, companies with multiple owners have a stronger chance of surviving their first five years than sole proprietorships, according to U.S. Small Business Administration data.
Yet sole proprietorships are more common than partnerships, making up more than 70 percent of all businesses. That's because while good partnerships are strong, they can be a challenge to successfully get off the ground. Here are some of the ingredients that good business partnerships require:
A shared vision. Business partnerships need a shared vision. If there are differences in vision, make an honest effort to find common ground. If you want to start a restaurant, and your partner envisions a fine dining experience with French cuisine while you want an American bistro, you're going to be disagreeing over everything from pricing and marketing to hiring and décor.
Compatible strengths. Different people bring different skills and personalities to a business. There is no stronger glue to hold a business partnership together than when partners need and rely on each other's abilities. Suppose one person is great at accounting and inventory management, and another is a natural at sales and marketing. Each is free to focus on what they are good at and can appreciate that their partner will pick up the slack in the areas where they are weak.
Defined roles and limitations. Before going into business, outline who will have what responsibilities. Agree on which things need consensus and which do not. Having this understanding up front will help resolve future disagreements. Outlining the limits of each person's role not only avoids conflict, it also identifies where you need to hire outside expertise to fill a skill gap in your partnership.
A conflict resolution strategy. Conflict is bound to arise even if the fundamentals of your partnership are strong. Set up a routine for resolving conflicts. Start with a schedule for frequent communication between partners. Allow each person to discuss issues without judgment. If compromise is still difficult after a discussion, it helps to have someone who can be a neutral arbiter, such as a trusted employee or consultant.
A goal-setting system. Create a system to set individual goals as well as business goals. Regularly meet together and set your goals, the steps needed to achieve them, who needs to take the next action step, and the expected date of completion.
An exit strategy. It's often easier to get into business with a partner than to exit when it isn't working out. Create a buy-sell agreement at the start of your business relationship that outlines how you'll exit the business and create a fair valuation system to pay the exiting owner. Neither the selling partner nor the buying partner want to feel taken advantage of during an ownership transition.
As always, should you have any questions or concerns regarding your tax situation please feel free to call.
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