I love the smells this month. Pumpkin, cinnamon, nutmeg. All my favorites. It's time for Medicare's Annual Election Period, but also when you try to figure out how to lower your yearly taxes. So, here are some friendly tips.
Smart Moves Before Year-End
1. If you are still working, you may want to see if you can defer any bonuses, especially if you are close to retirement.
2. If you have any deductions that will exceed the standard deductions for the year you haven't spent yet, you may want to go ahead and make the purchase or donation now so you don't forget. Make these donations count on your taxes if donating by Dec. 31. If you donate by credit card, you don't have to pay it off this year to receive the deduction.
3. Maximize your retirement. If you're still working, stuff that 401k, 403B, 457, or IRA, especially if your company matches your contributions. The IRS contribution limits for self-employed persons who contribute to a SEP IRA or Solo 401(k) are $70,000 for this year. For those 50 or older, there is also a $7,500 catch-up contribution amount allowing total contributions of $77,500. We can help you set up a SEP IRA.
4. Spend your FSA. If your company gives you an FSA, spend that money! HSA contributions remain yours forever!
5. Sell some of your loser stocks. If you have non-IRA investments that have gone down in value, did you know you can lock in your losses and use them to offset investment winners? To do this, you need to sell the losing investments. If your losses exceed your gains, you can apply $3,000 of that loss against your regular income, and any remainder will be passed to the next tax year.
Don't Miss These Tax Credits
6. Be aware of the 'other dependent' credit. Do you support your parents or grandparents? How about another loved one? If that happens to be you, and they qualify as a non-child dependent, make sure to take advantage of the new "Other Dependent Credit." This can reduce the taxes you owe dollar-for-dollar up to $500.
7. Do you pay property taxes on your home or state income taxes? Did you pay a lot in sales tax for a large purchase? You can deduct state and local property, income, or sales taxes, up to $10,000. In the past, these taxes were generally fully tax-deductible.
So, as you can see, there are several things that you can do. As always, we are here to help. Happy Halloween. Boo!
Note: Consult your tax and legal professionals. We do not provide tax or legal advice.
By Marc Frye
Marc Frye provides financial analysis and market commentary for the ARA newsletter, translating complex economic trends into actionable insights for retirees.
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Easy Eddie's Take
Marc's year-end checklist hits the big ones, and let me add some specifics for 2026. If you're wondering "how much can I contribute to my 401k if I'm over 50," the answer is $31,000 total ($23,500 regular contribution plus $7,500 catch-up). For traditional and Roth IRAs, it's $8,000 if you're 50 or older ($7,000 plus $1,000 catch-up). The IRS updates these limits every year, so it's worth checking annually.
One question that comes up all the time is about Required Minimum Distributions. If you're 73 or older, remember that your RMD deadline is December 31st, not April 15th like some other tax items. And here's something most people don't know: if you're still working at 73, you might be able to delay RMDs from your current employer's 401k, but not from old 401ks or traditional IRAs.
The tax loss harvesting Marc mentions is especially helpful this year, but watch out for the wash sale rule. You can't buy the same stock back within 30 days and still claim the loss. A little planning in these final weeks can save you hundreds or even thousands on your tax bill.