By Melanie Johnson
You’ve worked hard and invested smartly this year. As tax season approaches, you’re facing another challenge: keeping your tax burden to a minimum. We’ve helped countless clients in your position keep more of what’s theirs. These are some of the most common year-end tax strategies we’ve used when doing so.
Planning Charitable Giving
Some of the most useful year-end tax strategies involve charitable giving:
- Donor-advised funds (DAFs) allow you to bunch multiple years’ worth of donations.
- Donating appreciated stock helps you avoid capital gains tax.
- Qualified charitable distributions (QCDs) may help you avoid taxes on required minimum distributions (RMDs) by sending them directly to charity.
Timing deductions can be challenging, so we often suggest that our clients coordinate with a CPA.
Tax and Investment Management
When it comes to investment management, a significant year-end tax strategy is tax-loss harvesting. However, you should be mindful of the wash sale rule, which prohibits you from claiming the deduction if you repurchase the stock (or buy very similar stock) in the 30 days before or after the sale.
Asset location is important as well. Generally, we recommend contributing to tax-advantaged accounts first. It’s particularly important to take full advantage of any employer matching.
Implementing these types of year-end tax strategies can be a challenge, but you don’t have to do it alone. Schedule a portfolio review with us to start planning.
Health, Education & Family Accounts
Don’t forget about these small but meaningful year-end tax strategies:
- Maxing out HSA contributions
- Using 529-to-Roth IRA rollovers for unused educational funds
- Making monetary gifts under the annual reporting exclusion amount ($19,000 per recipient in 2025)
Small actions like these add up over time.
Roth Conversions & RMD Planning
If you’re a retiree in a gap year (not yet taking RMDs), a Roth conversion might be an effective way to begin long-term tax-bracket management. Are you turning 73 and must start taking RMDs soon? We can help you create a plan to lower your tax burden.
Estate & Legacy Planning
The One Big Beautiful Bill Act made higher gift and estate tax exemptions permanent. If you’re concerned about incurring estate tax, annual exclusion gifting can help reduce the value of your estate.
It’s wise to check in on your estate plan before the end of the year. If you haven’t already, schedule a review with us!
Maximizing Contributions to Retirement Accounts
One of the simplest ways to reduce taxable income is to maximize contributions to your retirement accounts—and this year, there are even more options on the table.
- 401(k), 403(b), and solo 401(k) plans: Make sure you’ve contributed the maximum amount for 2025.
- Catch-up contributions: If you’re 50 or older, you may be able to contribute even more—especially if you fall into the new enhanced catch-up range (ages 60–63). For 2025 (and 2026), this “super catch-up” allows an additional $11,250, while those 50+ can contribute an extra $7,500.
- Business owners: Consider advanced plans like a SEP IRA or defined benefit plan to defer a larger portion of income.
Looking ahead, high earners should be aware of a 2026 rule change: if your FICA wages exceed $145,000, all catch-up contributions—both the standard $7,500 and the enhanced $11,250—must be made on a Roth (after-tax) basis.
Need Help Navigating Year-End Tax Strategies?
Year-end tax strategies for you might look different than those for someone else. At Beck Capital Management, we believe smart tax planning and disciplined investing go hand in hand. Because our investment management and research are handled entirely in-house, we can time trades strategically, limit unnecessary fees, and manage portfolios with an eye toward tax efficiency.
Our focused, sector-strategic approach helps identify where opportunity lies while aiming to minimize short- and long-term capital gains. This proactive process—rooted in ongoing economic analysis—helps you keep more of what you earn and positions your portfolio for long-term success.
If you’re ready to take a more tax-efficient approach to your wealth, schedule a review with us today or schedule a meeting by calling (512) 345-6789 or emailing information@beckcapitalmanagement.com.
Tax Planning for High-Net-Worth Individuals
What tax strategies can high earners in Austin implement to reduce their tax liabilities?
High earners can minimize their tax burden by focusing on income shifting and deduction clustering. Key strategies include maximizing “above-the-line” deductions through 401(k) and HSA contributions, utilizing defined-benefit plans for business owners, and implementing Roth conversion ladders during lower-income years. Additionally, high-income professionals often benefit from “location optimization”—placing tax-inefficient assets (like high-yield bonds) into tax-deferred accounts while keeping growth equities in taxable accounts. Coordinating these moving parts into a cohesive tax-alpha strategy is a core service at Beck Capital Management in Austin.
How does tax-loss harvesting benefit high earners in managing their tax obligations?
Tax-loss harvesting is a sophisticated technique used to offset short-term and long-term capital gains by selling underperforming assets at a loss. For high earners in top tax brackets, this strategy is particularly potent because:
- Gains Neutralization: Realized losses can cancel out an unlimited amount of capital gains within the same tax year.
- Income Offset: If losses exceed gains, up to $3,000 can be used to offset ordinary income, with the remainder “carried forward” to future years.
- Wash-Sale Compliance: Investors must wait 30 days before repurchasing a “substantially identical” security to maintain the tax benefit.
Systematically identifying these opportunities throughout the year, rather than just in December, is a disciplined practice at Beck Capital Management in Austin.
Why should high earners in Austin consider charitable donations as a tax-saving strategy?
Beyond the philanthropic impact, charitable giving serves as a powerful tool for reducing Adjusted Gross Income (AGI). High earners often find greater efficiency by donating long-term appreciated securities (like stocks) instead of cash; this allows the donor to avoid capital gains taxes on the appreciation while still claiming a deduction for the full fair market value. For those with significant giving goals, a Donor-Advised Fund (DAF) can provide an immediate tax deduction in a high-income year while allowing the actual grants to charities to be distributed over time. Navigating these complex gifting vehicles is part of the integrated planning offered by Beck Capital Management in Austin.
About Melanie
Melanie Johnson began her career in the financial services business in 2004 when she founded a local comprehensive, independent wealth management firm. She joined the BCM team in 2011, assisting all types of clients with their financial planning and investment needs. Melanie has specialized experience in working with widowed, divorced, and retirement-focused individuals.
She is the founder of Divorce Financial Solutions and originated a divorce-focused workshop in Austin in 2006 called Second Saturday – What Everyone Needs to Know About Divorce. Melanie currently serves as National Director for Second Saturday Divorce Workshops, helping guide the program’s educational mission and support network nationwide.
Melanie is a Certified Divorce Financial Analyst™ (CDFA). This specialized training has provided a solid educational foundation for her as she assists divorcees by identifying and valuing marital assets and liabilities, as well as exploring creative solutions and options for the distribution of those assets. She is highly experienced at helping individuals as they navigate the financial complexities of divorce.
A native of Austin, Melanie loves spending time with her four children, traveling and being outdoors.
Disclosures:
This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
Any investments or strategies referenced herein do not take into account the investment objectives, financial situation, or particular needs of any specific person. Product suitability must be independently determined for each individual investor.
Beck Capital Management does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.
Determining when or if you should convert to a Roth IRA is an individual decision based on factors such as your financial situation, age, tax bracket, current assets, and alternate sources of retirement income. Your unique circumstances help determine what is appropriate for you. If converting a traditional IRA to a Roth IRA, you will owe ordinary income taxes on any previously deducted traditional IRA contributions and on all earnings. I suggest that you discuss tax issues with a qualified tax advisor.
Donor-advised funds can have fees and minimum donation requirements. Donations are irrevocable and assets can remain in the fund indefinitely. Although you can make suggestions as to which charities receive your distributed assets, the broker has the final say.