End-of-Year Tax Planning to Support Your CPA

Strategic tax planning begins well before the deadline. As we approach the end of the year, there are critical actions you can take to help avoid Tax Day surprises and maximize opportunities that may expire on December 31. Early planning also gives your CPA sufficient time to implement proactive strategies and avoid last-minute scrambling. Let’s review how you can streamline the process for your CPA.

Year-End Actions to Support Your CPA

CPAs are valuable resources to help you manage your tax liability; however, if you wait too long to engage them or get organized, they may be required to focus on compliance and accuracy rather than a proactive strategy. In collaboration, you can make the planning and filing process smoother with these steps:

• Organize Your Finances and Documents: Using a spreadsheet or other tax planning software, record your expenses and income, track charitable gifts and other deductions, and collect necessary receipts. Other important documents to collect include:
  • W-2s, 1099s, and other income records
  • Gains and losses statements for investments
  • Mortgage interest and property tax statements
  • Charitable giving receipts for anything over $250
  • Contribution and withdrawal statements for retirement accounts, HSAs, and FSAs
  • Gift tax statements
  • Necessary documents related to healthcare coverage, education and tuition, or dependent care
  • Business-related records, such as payroll taxes, for business owners.

• Review and Compile Investment Activity: Investments play a significant role in tax planning, so staying ahead can help your CPA ensure accuracy and identify opportunities. Here are steps you can consider:
  • Help your CPA calculate gains and losses on any investments you’ve sold, including recording critical information about holding periods, cost basis (the original purchase price), and profits.
  • Document any dividend distributions that may impact your taxable income.
  • Share any portfolio actions you took with your financial advisor this year, as well as carry forward amounts that could help reduce your taxable income.

• Share Significant Financial Actions and Life Changes: To help ensure alignment across your CPA and financial advisor, share the significant actions you took this year and any life changes or milestones that have occurred. Here are some questions you can answer:
  • Did you perform a Roth conversion, withdraw from a retirement account, or take required minimum distributions (RMDs)? 
  • Did you make investment decisions related to stock options or buying or selling assets?
  • Did you make a significant charitable donation or large gift to a loved one?
  • Have you experienced a change in your marital status or the number of dependents within your family?
  • Have there been any changes in your income, e.g., switching jobs, starting or exiting a business?
  • Have you received an inheritance or other windfall?

• Discuss your Future Goals: It’s also essential to evaluate and discuss what you hope to achieve in 2026 and beyond. Here are some questions you can consider:
  • Are you planning for college, buying a new home, or making other large purchases?
  • Are your retirement savings on track? Do you need to make adjustments to your contributions or savings vehicles?
  • Do you need to manage your tax bracket? What makes sense, given your current income?
  • Do you plan to make any changes to your business?
  • Is your estate planning aligned with your goals?
  • Do you want to explore or adjust your charitable giving strategy?
  • What are other short- and long-term financial objectives you’re working toward?

Year-End Strategies to Discuss with Your Financial Advisor and CPA

Your financial picture is a collaboration among you, your financial advisor, and your CPA to help produce the best outcomes. When discussing potential strategies you may benefit from, ensure your team is aligned and aware of your goals. Here are some tax planning strategies worth discussing before the end of the year:

• Tax-loss harvesting to help offset capital gains taxes and rebalance your portfolio
• Maximizing retirement account contributions, considering end-of-year deadlines, after-tax contributions, or a mega backdoor Roth
• Year-end charitable giving, such as bunching donations to maximize itemized deductions, giving to a donor-advised fund for an immediate tax break that spreads gifts over several years, or making a qualified charitable distribution (QCD) – a direct donation from an IRA to fulfill philanthropic goals and RMD requirements 
• Equity compensation planning and strategies surrounding your stock options, exercise decisions, and any related income
• Adjusting withholdings and estimated taxes to avoid underpayment, manage cash flow, and align with your projected income and tax liability
• Business strategies related to entity structure, asset depreciation, and the timing of income and expenses

Proactive, Year-Round Tax Planning

An ongoing approach to tax planning helps ensure you and your CPA can capitalize on available opportunities, identify gaps and risks, and work toward better financial outcomes. While Monarch doesn’t provide tax advice, we often work alongside our clients’ extended professional teams, including CPAs, to help align strategies, always focused on the best interests of our clients.

We encourage you to schedule a check-in with your CPA and financial advisor before the end of the year and early next year, so you’re organized, prepared, and have added peace of mind well before Tax Day. If you need help gathering and organizing documents or guidance about strategies to consider, please contact our team.

If you don’t yet work with a CPA or financial advisor, we’d be happy to introduce you to our team or make a referral from our network of trusted professionals.