2025 Year-End Insights & 2026 Outlook
2025 Year-End Insights & 2026 Outlook
As 2025 draws to a close, we want to help you tie up loose ends, take advantage of remaining planning opportunities, and prepare proactively for what’s ahead in 2026. Below, we’ve outlined key financial actions, deadlines, and updates to keep in mind as you finish the year strong.
Closing Out 2025: Key Actions Before Year-End
Retirement Accounts
- Required Minimum Distributions (RMDs): If you have a Traditional or Inherited IRA, make sure your RMD is completed by December 31, 2025. If you need to update your withdrawal instructions, please let us know as soon as possible. Additional paperwork may be required to complete changes before the deadline, and we want to make the process as smooth as possible for you.
- Employee Retirement Contributions:
- Contributions to 401(k), 403(b), 457, or SIMPLE plans must be made by December 31, 2025.
- Contributions to Traditional, Roth, and SEP IRAs can be made up to the tax filing deadline on April 15, 2026. If you’re unsure how much to contribute, we’re happy to help you review your options.
Charitable Giving
- Grant Requests: Charitable organizations often need extra time to process requests at year-end due to high volume. If you plan to give through Schwab Charitable this year, we encourage submitting grant requests by early December.
- Donor-Advised Fund Contributions:
- Check contributions must be postmarked by December 31, 2025.
- Investment transfers (mutual funds, stocks, etc.) can often take 2-4 weeks to process from outside firms, so we recommend initiating your transfer as soon as possible to avoid delays, as assets must be received by December 31, 2025.
Gifting and 529 Contributions
- Gift Tax Exclusion:
- The 2025 annual gift tax exclusion is $19,000 per recipient.
- Donations to a 529 account also count as gifts for tax purposes, and they are currently limited to $19,000 in 2025, per person. If you want to maximize contributions, ensure they are made by December 31, 2025.
Looking Ahead to 2026: Key IRS Updates
The IRS has released official 2026 inflation adjustments, including retirement plan contribution limits, estate planning updates, and tax changes.
Retirement Accounts
- Increased Contribution Limits:
- 401(k), 403(b), and 457 plans
- Base Contribution: $24,500
- Catch-Up Contribution (ages 50-59 or 64+): $8,000 (total $32,500)
- Enhanced Catch-Up Contribution (ages 60-63): $11,250 (total $35,750)
- Contribution Deadline: December 31, 2026
- Traditional & Roth IRAs
- Contribution Limit: $7,500
- Additional Catch-Up Contribution (age 50+): $1,100 (total $8,600)
- Contribution Deadline: April 15, 2027
- SEP IRAs
- Contribution Limit: Up to $72,000 or 25% of eligible compensation, whichever is lower
- Employer Contribution Deadline: April 15, 2027
- SIMPLE IRAs
- Base Contribution: $17,000
- Catch-Up Contribution (ages 50-59 or 64+): $4,000 ($21,000 total)
- Enhanced Catch-Up Contribution (ages 60-63): $5,250 ($22,250 total)
- Employee Contribution Deadline: January 30, 2027
- Employer Contribution Deadline: April 15, 2027
- 401(k), 403(b), and 457 plans
- Saver’s Credit Income Range Adjustment: The income ranges for determining eligibility to make deductible contributions to IRAs, contribute to Roth IRAs, and claim the Saver’s Credit have increased for 2026. For details, refer to IRS Notice 2025-67 or contact us for specific guidance.
Estate and Gifting Updates
- Federal Estate Tax Exemption: The federal exemption increases to $15,000,000 per individual (or $30,000,000 per married couple) in 2026.
- Washington State Estate Tax Exemption: Washington state’s estate tax exemption is currently $3,000,000 per individual (or $6,000,000 per married couple) in 2025. The 2026 exemption amount, which will include an inflation adjustment, has not yet been released and is expected to be announced in mid-December.
- Annual Gift Tax Exclusion:
- The gift tax exclusion for 2026 remains $19,000 per recipient (or $38,000 per married couple to the same recipient).
- Donations to a 529 account also count as gifts for tax purposes, and they are also limited to $19,000 in 2026, per person. If you want to maximize contributions, ensure they are made by December 31, 2026.
Charitable Giving Opportunities
- Qualified Charitable Distributions (QCDs): If you’re 70½ or older, you can direct up to $111,000 from your IRA to a qualified charity in 2026. This is a tax-smart way to meet RMD requirements while supporting causes close to your heart.
How We Can Support You
We’re here to ensure you end 2025 with confidence and step into 2026 feeling prepared. As you review your year-end priorities, here are a few ways we can support you:
- Year-End Tax & Savings Review: Contact us to review your tax strategy, maximize retirement contributions, and ensure you’re taking advantage of the updated 2026 IRS limits.
- Charitable Donations: If you’re planning to make charitable donations, especially with appreciated securities, starting the process early will help to ensure everything is completed on time.
- Planning for 2026: If you’d like help adjusting your savings plan, reviewing cash flow, or exploring tax-efficient strategies for the year ahead, we’re here to help guide you.
In summary, this is a great time to tie up year-end items, ensure you’re positioned well for 2026, and revisit opportunities to give, save, and invest intentionally. If you’d like to talk through how any of these updates apply to your situation, please reach out anytime.
With Optimism,
The Tschetter Group Planning Team
Disclosure: The content of this article is provided for general information purposes only. The information was compiled from sources that we believe to be reliable, however, we cannot guarantee accuracy. Tschetter Group does not provide tax or legal advice. Please consult your legal or tax professional for specific information.