WASHINGTON, Nov. 12, 2025 /PRNewswire/ -- With just a few weeks left in 2025, the American Institute of CPAs (AICPA) advises taxpayers to take action and make year-end tax and financial planning moves that can help prepare them for 2026, especially at tax time. Planning is even more important this year, ahead of the adoption of tax law changes effective this year and next.
"Taking action before the end of this year can be a huge benefit to your financial health in 2026," says Dan Snyder, CPA/PFS, Director of AICPA Personal Financial Planning. "There have been many changes in the tax and financial planning space this year and now is the time to educate yourself and make changes that can affect your tax bill before April 15, 2026."
TAX TIPS
- Standard deduction is higher for next year: Under the new tax bill, the standard deduction has been permanently increased and indexed for inflation. With higher standard deduction amounts, taxpayers should consider bunching itemized deductions.
- Charitable Giving Taxpayers need to consider timing of charitable donations before the tax law changes in 2026. In 2026, a small above-the-line deduction will be available and, for itemizers and high-income taxpayers, the tax benefits of charitable giving will have new limits. Taxpayers should also make sure to keep thorough records of all donations, including receipts and bank statements.
- Check your W4 withholdings: Accurate withholding helps ensure that you are paying enough tax through payroll and reduces the chance that you will owe a significant amount on your next tax return.
- Senior bonus deduction: Taxpayers age 65+ with AGI under the limits may claim a $6,000 deduction for 2025-2028. Qualifying taxpayers may want to consider ways to reduce their taxable income to qualify for the deduction.
- Check your qualifications for deductions on tips and overtime: Applicable for tax year 2025, a new federal tax deduction is available on overtime and tips. There are income phaseouts and reporting requirements for these deductions.
- Take advantage of the new deduction for buying an American car assembled in the US: This new deduction applies to tax year 2025 and allows individuals to write off the interest paid on auto loans for these vehicles, up to $10,000. There are income phaseouts for this deduction.
PERSONAL FINANCIAL PLANNING TIPS
- Update beneficiaries if necessary: This can be an easy way to save yourself and your heirs from an expensive mistake. Review your designations for items like life insurance and retirement plans and make sure beneficiary names are updated. Beneficiary forms supersede will and trust directives when settling an estate.
- Consider a Roth IRA conversion: Consider converting traditional IRA funds to Roth IRAs if you expect higher future tax rates and fits your retirement (to allow tax-free distributions) and estate plans (heirs would inherit tax-free asset).
- Plan for education: Recent changes to legislation, in particular, for 529 plans, may qualify contributions for state tax deductions and allow gifting up to IRS limits but these contributions need to be made by the end of the year.
- Harvest your investment losses and gains: Align your harvesting strategy with current and projected income levels to make the most of available tax thresholds. Consider selling investments that have declined in value to offset capital gains to reduce your taxable income. If you are in a lower tax bracket or have unused losses, you might benefit from selling appreciated assets to lock in gains.
- Spend through flexible savings accounts: Now is the time to "use it or lose it "when it comes to Flexible Savings Accounts (FSAs) or Limited FSAs. Some FSAs will allow you to carry over a certain amount, so be sure to check your individual plan to see if any of those funds carry over into next year.
- Take all of your Required Minimum Distributions (RMDs): If you miss the deadline, you could be subject to a 25% penalty on the portion of your RMD you failed to withdraw.
- Catch up on your 401k contributions: If you are over the age of 50, you can contribute up to $31,000 to your 401k plan in 2025. There is a special rule for those aged 60-63 that allows additional contributions for a total allowable contribution of $34,750 for 2025, with additional strategies that can allow even more. Make sure you've maximized your contributions and make plans to modify your contribution amounts for 2026.
- Take advantage of Medicare Open Enrollment: Medicare Open Enrollment ends December 7, 2025. Evaluate your prescriptions, potential changes in insurance drug lists and how effective the plan you currently have has been for your health needs. Consider making changes to your plan or adding additional coverage. For 2026, Medicare has implemented a $2,100 out-of-pocket maximum for Part D prescription drugs.
"Talk with your CPA or CPA Personal Financial Specialist (CPA/PFS) as soon as possible," says Snyder. "They have the knowledge to best help you with taxes and much more for this year and next. The more communication you have with him/her, the better they can help you plan for your financial future."
About the American Institute of CPAs
The American Institute of CPAs® (AICPA®) is the world's largest member association representing the CPA profession, with 397,000 members and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education, and consulting. A founding member of the Association of International Certified Professional Accountants, the AICPA sets ethical standards for the profession, attestation standards, and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state, and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, partners across the profession to build future talent, and drives continuing education to advance the vitality, relevance, and quality of the profession.
SOURCE AICPA
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