December 2025

Once the holiday rush is over, resist the urge to put your finances away. January is the ideal time to review your accounts and prepare for tax season.

• Organize for Tax Season: Use the downtime to gather your 1099s, K-1s, and W-2s as they arrive. A little organization now saves a lot of stress (and potentially fees) later when the filing deadline looms.
• Review Your Withholding: Did you owe a lot of tax this year? Or get a huge refund? A large refund means you gave the government an interest-free loan all year. We can help you adjust your payroll withholding or estimated tax payments to better match your tax liability in the coming year.
• Schedule Your Q1 Planning Session: Let's look beyond tax filing. January is the perfect time to review business budgets, investment portfolio allocations, and major financial goals for the next 12 months.

December is the final window to claim a tax deduction for your charitable gifts this year. This is especially strategic now, as tax rules may change in 2026, making it critical to maximize your giving under current law.

• Use Your IRA (QCD): If you're 70½ or older, consider making a Qualified Charitable Distribution (QCD) directly from your IRA (up to $108,000 for 2025). The transfer is excluded from your taxable income, a powerful benefit that helps reduce your Adjusted Gross Income (AGI).
• Donate Appreciated Stock: Instead of donating cash, give appreciated assets (stocks or mutual funds) you've held for over a year. You receive a deduction for the full fair market value and completely avoid paying capital gains tax on the appreciation.
• "Bunch" with a Donor-Advised Fund (DAF): Consider contributing several years' worth of giving to a DAF in December 2025. This allows you to claim a large deduction now under current favorable rules, while still spreading out your actual grants to charities over the next few years.
• Consider Forming a Private Charity: For high-net-worth clients with significant philanthropic goals, forming a private Non-Profit charity (such as a private foundation) can be a powerful long-term strategy. This allows for dedicated control and a lasting legacy.

  ○ Corporate & Business Deductions: Your corporation can make a tax-deductible donation to this charity, potentially deducting up to 10% of its taxable income. For an LLC or other pass-through entity, the deduction passes through to the owner's personal return, generally subject to the individual limit (up to 60% of AGI for cash gifts to a public charity).

  ○ Strategic Revenue: An LLC owned by a client can, under strict fair-market-value rules, contract with the client's non-profit to provide services (e.g., administrative, management). Payments for these services become a deductible expense for the non-profit and a source of taxable income for the LLC/client, offering a unique structure for managing a charitable enterprise. (Note: This strategy requires careful legal and tax structuring to ensure the non-profit maintains its tax-exempt status and avoids prohibited private benefit or self-dealing.)

While a will is a foundational piece of an estate plan, it is often not enough to fully protect your assets and wishes. A comprehensive plan requires several specialized documents, especially for financial matters:

The Essential Financial Protectors

1. Durable Power of Attorney (POA): This document appoints someone you trust (your agent) to make financial decisions on your behalf if you become incapacitated. A regular POA often expires upon incapacity; the "Durable" clause ensures it remains valid when you need it most.
2. Health Care Directive/Living Will: This grants an agent the ability to make medical decisions if you cannot. While not purely financial, it prevents family members from draining resources on unwanted or aggressive treatments.
3. The Revocable Trust: For clients with significant assets or those who want to spare their heirs the time and expense of probate (the public, court-supervised process of settling an estate), a trust is invaluable. Assets held in a trust pass directly to beneficiaries privately and often much faster.

Critical Check: Beneficiary Designations

Your Will DOES NOT control where your retirement accounts or life insurance proceeds go. The names listed on your plan's Beneficiary Designation Form supersede your will. If a spouse or primary beneficiary has passed away, you must update these forms immediately, or the proceeds may go to unintended recipients.

• We recommend reviewing these forms annually. If you need assistance gathering your necessary documents or understanding the role of a trust in your financial legacy, please contact our office.