AMONG THE KEY TAX TOPICS: Taking time to review your financial and tax position each year could help you (and your family) keep more of what you’ve earned. “That’s especially true in years like 2025, which bring significant changes in tax legislation,” says tax accountant Vinay Navani of WilkinGuttenplan.

The sweeping new legislation, dubbed the “One Big Beautiful Bill Act” (or OBBBA) was signed into law on July 4, 2025, and contains provisions that could influence decisions on itemizing or taking the standard deduction (see tip 1), planning your estate (tip 2), giving to charity (tip 3), helping your child save (tip 6) and more.

Below, Navani shares insights on tax-efficient approaches to your finances. While some strategies apply to any year, he’ll point out what to be especially aware of under the OBBBA. Ask your personal tax advisor whether these tips might make sense for you. Be sure to visit our Market briefs page for the latest federal tax law changes that could impact your finances.

1. Factor in higher state, local, and standard deductions

For taxpayers who itemize their deductions, the biggest news in the OBBBA may be the increase in the state and local tax (SALT) deduction from $10,000 to $40,000, from 2025 through 2029. (The additional $30,000 deduction phases down for those with adjusted gross income (AGI) above $500,000 and terminates after $600,000). “If you itemize, and your SALT deductions for 2025 add up to less than $40,000, you might consider prepaying some of next year’s state or local taxes to claim the full deduction,” Navani suggests.

At a broader level, OBBBA invites questions over whether to itemize or use the standard deduction. While itemizing may feel like the obvious choice with $40,000 of potential SALT deductions, the bill also raises the standard deduction permanently to $31,500 for married couples filing jointly (up from $30,000) and $15,750 for individuals (up from $15,000), adjusted annually for inflation. “Your tax professional can run the numbers and help you decide whether the standard deduction or itemizing works best for your situation,” Navani advises.

If you’re already 65 or older, the new bill offers a financial boost up in the form of an additional $6,000 deduction for individuals ($12,000 for couples) for the 2025 though 2028 tax years. The deduction, which applies whether you itemize or not, gradually phases out for individuals with modified adjusted gross income (MAGI) above $75,000 (or $150,000 for couples). Contrary to some reports, the deduction does not eliminate taxes on Social Security benefits; rather, it applies to your total income, which includes Social Security. It’s important to note that eligible seniors can claim the tax deduction whether they itemize their taxes or not.

2. Review your gift and estate plans

The high federal gift and estate tax exemption set by the 2017 Tax Cuts and Jobs Act was made permanent under OBBBA, removing a major uncertainty for taxpayers with significant estates, Navani notes. Prior to the legislation, with the exemption set to drop steeply at the end of 2025, individuals and their advisors had been scrambling to make gift and estate decisions before the deadline. “Now, instead of dropping, the exemption will actually rise to $15 million for individuals and $30 million for married couples in 2026, adjusted annually thereafter for inflation,” he says. “While estate planning still requires time and careful thinking, it’s more about fundamentals.” For example, consider the current value of assets you own, such as investments or shares of a family business. Gifting when values are temporarily down could enable you to move more shares out of your estate without triggering taxes.

A big part of the planning may involve the best ways to structure gifts. “You may not want to give substantial sums of money directly to a 16-year-old,” he says. “So, you may want to speak with your advisor and tax specialist about what types of trusts could meet your needs. You’ll need to consider trust terms, such as distributions, duration and naming a trustee, among other details. It’s good to get those conversations going.”

3. Consider your charitable giving

If philanthropy is important to you, now could be a good time to consider giving more. If you regularly give to charities and itemize your deductions on your income tax returns, consider putting several years’ worth of gifts into a donor-advised fund (DAF) before the end of 2025, Navani suggests. “That way, you may earn an immediate deduction, and you can spread out the giving from the DAF over the next several years.”

If you make cash gifts to individual charities, the 2025 bill contains some new provisions that could influence the timing of your gifts, depending on whether you itemize deductions or use the standard deduction. Starting in 2026, those using the standard deduction will be able to claim up to $1,000 for individuals ($2,000 for married couples filing jointly) for cash gifts directed to a public charity (i.e., not through a DAF), Navani notes. By contrast, itemizers, starting in 2026, will have to contribute at least 0.5% of their “contribution base” (essentially AGI) before claiming charitable deductions. Thus, itemizers might want to consider accelerating their gifts in 2025, before the 0.5% floor kicks in next year. Beginning in 2026, overall itemized deductions, including charitable gifts, will be slightly reduced for taxpayers in the top tax bracket (estimated to be about $640,000 for individual and $770,000 for couples) – yet another reason for taxpayers who itemize to bunch charitable deductions into 2025.

Of course, none of these decisions should be made based on taxes alone, Navani adds, so be sure to consult your team before making any decisions.

4. Consider offsetting investment gains with losses you’ve experienced

If you have sold stocks that performed especially well in the past year, subjecting you to potential federal capital gains taxes, you might consider offsetting those capital gains with capital losses you’ve experienced elsewhere in your portfolio, Navani suggests. This process, known as tax-loss harvesting, could enable you to sell underperforming assets that you were planning to sell anyway and invest the proceeds in assets you consider to be more promising. If your capital losses for the year are greater than your capital gains, you may apply up to $3,000 of losses ($1,500 if you’re married filing separately) to offset your ordinary income, for federal income tax purposes.

If you take this approach, be sure not to repurchase the same or substantially similar assets within 30 days before or after the sale, to avoid triggering the wash sale rules, which would disallow the loss. If the losses include not just marketable securities but shares of a privately held company deemed worthless because the company went out of business, you may need additional documentation, Navani says. “Due diligence takes time, so don’t wait until the end of the year to consult your tax advisor.”

Loss harvesting strategies aren’t right for every situation and should only be pursued with your long-term investment goals in mind. Selling assets solely for tax purposes could amount to “the tax tail wagging the investment dog,” Navani advises. And claiming capital losses comes with other considerations based on how long you’ve held the assets you sell, what you invest in as a replacement, and other factors.

5. Max out on your retirement plan

Think about increasing your contributions to your 401(k), IRA or other qualified retirement plan to reach the maximum contribution amount. Not only does this offer the possibility of increasing your retirement savings, but it could also potentially lower your taxable income. Since many new tax deductions in the OBBBA (e.g., the senior exemption and the SALT, tip and overtime deduction) phase out as AGI increases, a pre-tax 401k or a tax-deductible contribution to a traditional IRA could be a good way of lowering income and preserving those deductions. For 2025, the 401(k) contribution limit is $23,500), while the IRA contribution limit remains unchanged at $7,000.¹ You can learn more information about contribution limits in our guide.

If you’ll be age 50 or older at any time during the calendar year, you may be able to take advantage of “catch-up” contributions, Navani suggests. For those age 50 or older, the 401(k) limit with catch-up contributions is $31,000, and for those who are age 60 to 63, the limit is $34,750, all subject to the terms of the retirement plan. For IRAs, the limit including catch-up contributions is $8,000 for those age 50 or older. If permitted under the terms of the retirement plan, you generally have until the end of the calendar year to contribute to a 401(k) plan and until April 15 of the following year to contribute to an IRA for the previous calendar year.

6. Give your kids a leg up on their own retirement

“While many parents would like to get their children started early on saving, a traditional sticking point is that you need earned income to start an IRA—which most kids don’t have,” Navani says. The OBBBA introduced new “Trump Accounts” for children, which are similar to traditional IRAs and may be opened for children under age 18. Unlike traditional IRAs, Trump Accounts can be opened for children without any earned income. Before age 18, annual aggregate contributions made by you, your relatives or any other person are limited to a total of $5,000 (indexed starting in 2028). When your child turns 18, traditional IRA rules apply, potentially setting your child up for a lifetime of savings. As additional incentive, Trump Accounts set up for children born from 2025 through 2028 are eligible for a $1,000, one-time “seed” contribution from the federal government. Be aware of some restrictions: contributions can’t be made until July 4, 2026, and distributions are not permitted until January 1 of the calendar year in which your child attains age 18. The IRS is expected to provide additional guidance regarding Trump Accounts, including who can create them.

7. Consider converting your traditional IRA to a Roth IRA

Under existing federal tax law, anyone can convert all or a portion of their assets in a traditional IRA to a Roth IRA. Unlike with a traditional IRA, qualified distributions of converted amounts from a Roth IRA aren’t generally subject to federal income taxes, as long as:

• At least five years have passed since the first of the year of your first Roth IRA contribution or conversion.
  and
• You are age 59½ or older, become disabled, or die.

However, you’re required to pay federal income taxes on the amount of your deductible contributions as well as any associated earnings when you convert to a Roth IRA. Also, it is important to remember, IRA conversions will not trigger the 10% additional tax on early distributions at the time of the conversion, but the 10% additional tax may apply later on the converted amounts if the amounts converted are distributed from the Roth IRA before satisfying a special five-year holding period starting in the year of the conversion. While the OBBBA did not change the rules on Roth conversions, a Roth conversion could increase AGI which could result in one or more OBBBA deductions (e.g. SALT deduction) phasing out.

“If the value of the investments in your traditional IRA is temporarily down, it may be a good time to consider converting,” Navani suggests. Consult with your tax advisor to see if this approach is appropriate for you.

8. Look for tax-aware investing strategies

Putting a portion of your income into investments not generally subject to federal income taxes, such as tax-free municipal bonds, could potentially ease your tax burden. “Depending on when in the year you purchase municipal bonds, you may or may not receive any interest income for that year,” Navani says. “But in the first full calendar year after purchase, you’ll realize the benefit of the tax-free interest (though the interest may be taxable for state tax purposes).”

Keep in mind that if your MAGI is at least $200,000 for individuals, you're subject to a 3.8% Net Investment Income Tax (NIIT) on the lesser of your net investment income or the amount your MAGI exceeds the $200,000 statutory threshold amount. Certain exclusions apply, and municipal bond income, discussed above, is not subject to NIIT. (Consult your tax advisor.) The threshold is $250,000 for married couples filing jointly or for qualifying widows or widowers with a dependent child, and $125,000 for taxpayers who are married and filing separately.

9. Fund a 529 education savings plan

By putting money into a 529 education savings plan account, you may be able to give a gift to a beneficiary of any age without incurring federal gift tax. You may also be able to contribute up to five years’ worth of the annual gift tax exclusion amount per beneficiary in one year, subject to certain conditions. 529 accounts may be used to pay for qualified higher education expenses of the beneficiary – say, for instance, a child or grandchild – at an eligible educational institution.

For 2025, funds in a 529 account can also be used to pay up to $10,000 of qualified primary or secondary school expenses from all 529 accounts for a beneficiary. The OBBBA changed the expense limit from $10,000 to $20,000 per calendar year per beneficiary beginning in 2026. While the primary and secondary school expenses previously could cover only tuition, the OBBBA also expanded the list to include expenses such as books, digital tools, testing fees and more and applies to distributions made from the 529 account after July 4, 2025. Some states do not conform to the federal rules, so it is important to check your particular state’s rules regarding eligible expenses.

Now may be a good time to review your 529 account investments to be sure you’re still on track to meet your education goals, Navani suggests. “Especially if the money will be needed soon, you may want to adjust your contributions and investments accordingly.”

10. Cover healthcare costs efficiently

Both health savings accounts (HSAs) and health flexible spending accounts (health FSAs) could allow you to sock away tax deductible or pretax contributions to pay for certain medical expenses your insurance doesn’t cover.

But there are key differences to these accounts. Most notably, to take advantage of an HSA, you must be enrolled in a high-deductible health insurance plan, and you cannot have disqualifying additional medical coverage, such as a general-purpose health FSA. Also, unless the FSA is a “limited purpose” FSA, you cannot contribute to both accounts.

One important benefit of HSAs is that you don't have to spend all the money in your account each year, unlike a health FSA. Generally, the funds you contribute to a health FSA must be spent during the same plan year. However, some employers may allow roll overs up to a maximum of $660 in unused health FSA funds for 2026, and others allow a grace period of up to 2½ months following the end of the year to use your unspent funds on qualified benefit expenses incurred during the grace period.

Also, you can deposit funds into an HSA up to the tax filing due date in the following year (up to the maximum dollar limit) and still receive a tax deduction. For example, you can make a 2025 contribution by April 15, 2026. Meanwhile, health FSA contributions are generally only elected during open enrollment or when you become an employee of a company.

Be sure to check your employer's rules for health FSA accounts. If you have a balance, you may want to consider estimating and planning your health care spending for the remainder of this year. In addition, see if the account balance can be used to reimburse you for qualified medical costs you paid out-of-pocket earlier in the year. For more on HSA contribution and plan limits, see our contribution limits guide.