End-of-year financial checklist for 2025

A year-end financial review is a simple yet powerful practice that can help you improve your money habits and build a stronger financial foundation. It offers a clear pulse check on your personal finances while giving you an opportunity to mitigate risks, harness potential tax-saving opportunities and set yourself up for success.

This end-of-year financial checklist outlines 10 financial planning steps to position yourself for success in 2026—and potentially secure a larger tax refund in the process.

1Read up on tax rules

Most people don't give income taxes much thought until the April 15 filing deadline looms. But taking the time now to review essential updates can set you up for a smoother tax season—and potentially a lower tax bill.

• Review annual IRS updates. Each year, the IRS updates a range of provisions like federal tax brackets, contribution limits, tax deductions and credits. While routine, these annual updates can quietly reshape your tax bill. Take the time to understand the latest IRS updates to avoid surprises when it comes time to file.
• Get familiar with new laws. With the passing of the One Big Beautiful Bill Act, or OBBBA, there are even more tax changes than usual. Many of the new tax rules introduced by the OBBBA won't apply until you file 2026 taxes in 2027, but it's helpful to understand them now so you can make informed financial decisions in the coming year.
• Revisit the fundamentals. A quick refresher of the basics—such as the difference between tax credits and deductions—can pay off come tax time. With a strong grasp of the essentials, you'll be better positioned to reduce your taxable income and make smarter year-end decisions.

2Maximize tax-advantaged accounts

Maximizing contributions to tax-advantaged accounts remains one of the most effective ways to reduce your 2025 taxable income. Strategic contributions can lower your current tax bill while building long-term wealth. Here are some strategies you can implement to make the most of them.

• Max out your employer-sponsored plan. For 2025, the maximum 401(k) contribution is $23,500 if you're younger than 50. If this isn't achievable, aim to contribute enough to receive your full employer match.
• Take advantage of catch-up contributions. If you're 50 or older, you're eligible to make catch-up contributions. This is a great way to catch up on retirement savings while reducing your tax burden.
• Consider a self-employed plan. If you earn income from consulting, freelancing or a side hustle, consider contributing to a retirement plan for the self-employed. These plans let you contribute as both employee and employer, giving you higher potential deductions.
• Further boost your savings. If you have funds to spare, consider an individual retirement account, or IRA. While both traditional and Roth IRAs can be valuable supplements to your workplace plan, traditional IRAs may offer immediate tax deductions.

3Check in on workplace spending accounts

Workplace benefits like flexible spending accounts, or FSAs, and healthcare savings accounts, or HSAs, offer strong tax advantages—but only if you use them correctly. Be sure to take the following steps before the end of the year.

• Make sure you haven't overfunded your HSA. The IRS may impose a 6% excise tax annually on any excess contributions that remain in the account at the end of the tax year. If your account is overfunded, contact your plan administrator. The most common solution is to withdraw excess funds by the end of the year.
• Use your FSA, or risk losing it. Don't forget to spend your flexible dollars before the end of the year. Most unused funds will be forfeited unless your employer offers a grace period or small rollover.

4Consider charitable giving

Charitable giving is a meaningful way to support the causes you value while potentially reducing your taxable income. You can deduct cash or property contributions to qualified charitable organizations, but the tax benefit you receive depends on whether you take the standard deduction or itemize.

• If you take the standard deduction: Starting in 2026, you can deduct cash donations up to $1,000 as a single filer, or $2,000 if you're married and filing jointly.
• If you itemize: Qualified charitable contributions continue to be tax-deductible, but new rules will apply. Starting in 2026, contributions must exceed 0.5% of adjusted gross income to qualify. For high earners, total itemized deductions—including charitable gifts—will be capped at 35%.

These rules won't apply until you file your 2026 taxes in 2027, giving you time to identify giving opportunities in the coming year.

5See if you're eligible for new tax deductions

Several new or expanded deductions could reduce your taxable income. If you fall under any of the following categories, take time to research how these deductions may influence your tax return.

• Retirees age 65 and older: If you collect Social Security, you may be eligible for a temporary federal deduction of $6,000, or $12,000 for married couples. This deduction will be available through the end of 2028.
• Freelancers: You may qualify for the §199A deduction, which has been made permanent. This provision allows eligible taxpayers to deduct up to 20% of qualified business income from 1099 income.
• Hourly workers: A new provision allows hourly employees to deduct up to $12,500 in qualified overtime compensation. This temporary deduction—set to expire December 31, 2028—applies only to the extra half of time-and-a-half pay. For example, if your standard hourly rate is $30 and your overtime rate is $45, you could deduct only the $15 premium earned for each overtime hour.
• Tipped workers: For tax years 2025 through 2028, you may be eligible to deduct up to $25,000 in qualified tips from your federal income tax. However, these tips may still be subject to Social Security and Medicare deductions, along with any state and local taxes.

Take the time to understand new deductions so you're better prepared to take full advantage of them—especially because strict eligibility criteria applies, and most begin to phase out at certain income levels.

6Review retirement accounts

If you're in retirement, a year-end financial review is particularly important. Add the following steps to your year-end planning checklist to avoid penalties and keep future healthcare costs in check.

• Check required minimum distributions. If you're subject to required minimum distributions, or RMDs, confirm that you've taken all mandatory withdrawals before December 31. Failing to do so before the deadline can trigger a 25% penalty on the amount not withdrawn.
• Monitor your modified adjusted gross income. For Medicare enrollees, the income-related monthly adjustment amount, or IRMAA, is based on your modified adjusted gross income, or MAGI, from 2 years earlier. This means your 2025 income will set your Medicare premiums in 2027, and even a modest increase in income could bump you into a higher IRMAA bracket and raise your future healthcare costs.

If you still need to take your full RMD—or if you're close to crossing into a higher IRMAA bracket—a qualified charitable distribution, or QCD, may be a smart move. A QCD counts toward your RMD while reducing your MAGI, helping limit future IRMAA surcharges. For 2025, you can donate up to $108,000 directly from an IRA to qualified charities. QCDs are also excluded from taxable income, providing a tax break even if you don't itemize deductions.

7Fund long-term family goals

The end of the year is a great time to engage in family financial planning and identify ways to support the next generation. Strategic contributions today can benefit your children or grandchildren for years to come. Consider the following strategies.

• Use annual gifting exclusions. For 2025, the IRS allows you to gift up to $19,000 per person, per year without triggering the federal gift tax. These gifts can reduce the size of your taxable estate while providing meaningful financial support to loved ones.
• Contribute to a 529 plan. This can be a powerful way to help fund your children or grandchildren's education expenses. The funds in 529 plans grow tax-deferred and allow tax-free withdrawals for qualified education expenses. Contributions to a 529 plan will count against your annual gift-tax exclusion. And you can front-load 5 years' worth of annual exclusion gift amounts in the first year—up to $95,000 per donor—without incurring gift taxes.

8Build a stronger foundation

A year-end financial review gives you an opportunity to take stock of your personal finances and look for ways to strengthen your foundation for the coming year. Here are some steps you can take to evaluate your situation.

• Assess your financial picture. Digital money management tools can help you look back at where your money went this year and identify opportunities to cut back unnecessary expenses and redirect funds toward future goals, savings or debt payoff.
• Replenish your emergency fund. If you've tapped into your emergency fund this year, create a plan to rebuild it. Ideally, you should have at least 3 to 6 months of emergency savings set aside for the year ahead.
• Set new savings goals. Whether you're planning a vacation, saving to buy your first home or working toward another milestone, now is a great time to set your target and map out a plan to reach it.
• Make a plan for your refund. If you're expecting to get money back from the IRS, use this time to determine how to use your tax refund to further financial goals—such as paying down high-interest debt, boosting retirement contributions or growing your emergency fund. A formalized plan can prevent you from spending it unwisely when your refund arrives.

9Check beneficiary designations

Making beneficiary reviews part of your end-of-year financial checklist is a smart habit. Take a few minutes to confirm that designations are in place, up to date and aligned with your current wishes.

It's important to remember that beneficiary designations generally take precedence over your will, which means outdated information could override your estate plan. Major life events like marriages, divorces, births and deaths are key triggers to review and update these designations.

10Review insurance coverage

Even the best financial plans can be undone if you don't have the right protection in place. The end of the year is a good time to reassess your coverage and identify any potential risks.

• Close coverage gaps. Climate-related events—such as floods, wildfires and severe storms—are rising. Review your homeowners, renters and auto policies to confirm that coverage limits and exclusions still provide sufficient protection.
• Consider umbrella insurance. This relatively inexpensive extra layer of liability protection can safeguard your assets in the event of a lawsuit or large claim.
• Protect your income and savings. Disability insurance replaces lost earnings if illness or injury prevents you from working, while long-term care insurance helps cover the costs of extended-care needs. Both can shore up your financial stability and preserve retirement savings.

The bottom line

This end-of-year financial checklist can help you reduce 2025 taxes, strengthen your financial foundation and prepare for 2026 opportunities. Maximizing tax-advantaged contributions, understanding new deductions and reviewing insurance coverage can provide comprehensive year-end tax planning that delivers measurable results while giving you peace of mind.

Key takeaways

• A year-end financial review offers a powerful opportunity to strengthen your finances so you can uncover tax-saving opportunities, mitigate risks and set clear goals for the year ahead.
• Review tax-advantaged accounts, distributions and employer-sponsored benefits before December 31 to avoid penalties, surcharges and forfeited funds.
• Connect with a financial advisor or tax professional to maximize today's opportunities while preparing for tomorrow's changes.