Introduction and Housekeeping
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Francisco Sirvent: Hello, hello! Welcome, welcome everybody. We are here for end-of-year tax tips. My name is Francisco Sirvent. I know a lot of you attending, but I don’t know everybody—so welcome! As I said, my name is Francisco Sirvent; I’m the founder and one of the attorneys here at Keystone Law Firm. My partner Michelle Dexter is here, and Alexis, one of our other team members, is also joining us. Thank you, everybody, for coming.
Before I dive into the topic, I want to give you a couple of housekeeping items. First, we are recording this so that we can share it afterward on our YouTube channel. If you haven’t been over there, check it out. We are putting all of our webinars up there so you can watch them live or catch up on any past ones you might have missed.
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They are presented in full. If we talk about something here that sparks your interest and you need to listen to it again—because sometimes you just need to hear it once or twice—you can pause, slow it down, or speed it up. It will be there for you. Additionally, if you know someone who would like to learn this, you’re welcome to point them to that YouTube channel. It’s easy to find at youtube.com/KeystoneLawFirm.
We also have a bunch of other helpful videos there about estate planning, trusts, wills, and probate. Hopefully, that information gives you some tips and answers to help you take care of your family. We also have some of our 2026 webinars scheduled, so check the events page on our website at keystonelawfirm.com/events to see what’s coming.
Webinar Guidelines and Legal Notices
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I think this is our last one for the year, so congratulations to those of you who made it! Good job. Let’s get started. A lot has changed this year in the tax code—and funny enough, a lot has changed, but a lot remains the same.
I am happy to take questions as we go, though I am not going to unmute your microphones yet. Please just drop your questions in the chat; that’s the best way for me to manage them. When we get to the end, we’ll have time for live questions, and I’ll let you turn your microphones on then. However, because we are recording this, please do not share anything too personally identifiable. Don’t say too much about your specific situation because this will be shared publicly. Ask your questions in a way that feels generic or hypothetical.
00:06:30
Now for the legal notices: This is general information of an educational nature. This is not specific legal, tax, or financial advice for your situation. If you need specific advice, please consult your qualified advisor. If you don’t have someone who helps you take care of all those things under one roof, that’s what we do with our Retirement Management Office. I’d be happy to speak with anyone about that if you don’t currently have those services combined.
Retirement Accounts and RMDs
All right, here are the “quick hitters” for this year. Every year, if you are in retirement and past the age for Required Minimum Distributions (RMDs) from your retirement accounts—like IRAs and 401(k)s—please make sure they are done. There are big penalties if you don’t take the distribution in the year it’s due. Even if you don’t need the money, you must take it.
Double-check your numbers. The institution holding your IRA is required to provide these. On your January statement, it should list your December 31st balance from the previous year, which dictates how much you must take out during 2025. Review each of your accounts to confirm.
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You don’t have to take the individual amount from each specific account if you have multiples; you can take the total aggregate amount from just one, but the total must satisfy the requirement. Since today is December 17th, most institutions can still get those distributions done, but if you call them on the 31st, they probably won’t be able to process them in time. So, calculate those numbers and get it figured out now.
There are also people who can still make contributions to IRAs and Roth accounts. Those aren’t technically due until Tax Day next year, but there’s no reason you can’t look at that now. You can make contributions if you have earned income. If you’re doing a little consulting on the side or have a part-time gig where you’re getting a 1099 or a W-2, you can contribute.
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If you contribute to a traditional IRA, it reduces your taxable income; if you contribute to a Roth, it does not. Now is a good time to think about that. Also, if you are employed and your employer has a 401(k) or 403(b) plan, those contributions must be made before the end of the year. It’s a great time for “catch-up” contributions. Hopefully, there is still time for your employer to make adjustments if you want to stuff some extra money in there. At the very least, contribute enough to get the employer match. It’s a great savings tool that reduces your income for the year.
Investment Strategies and Tax Loss Harvesting
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It’s also a good time to look at your brokerage accounts—these are after-tax accounts or individual stock holdings. For example, Bitcoin has taken a big dive the last couple of weeks. It might be a good time to “harvest” some of those losses. I know it feels like taking a hit, but you can sell now to take the loss on your taxes. As long as you wait at least 30 days to repurchase it (to avoid “wash sale” rules), you can get the tax benefit this year. You must do these transactions before year-end.
Regarding Roth conversions: some of you may be in a tax bracket that has some “room” before you hit the next bracket.
00:11:35
If you have $10,000 left before you hit the next bracket, you might consider converting $10,000 from an IRA to a Roth. That conversion adds to your taxable income now, but most people expect taxes to go up in the future. Getting money into a Roth at current rates—even if you pay the tax now—might be a smart move.
Charitable Giving and Arizona Tax Credits
If you haven’t done your RMDs and you don’t need the money—and you’re already giving to charity from your checking account—stop doing that. Instead, make those charitable gifts directly from your IRA. This is called a Qualified Charitable Distribution (QCD).
QCDs are a great way to handle your RMD. Instead of taking the money out, paying taxes, and then giving it to charity, you direct it from the IRA to the charity. It never counts as income to you. This is a “today or tomorrow” task to get it processed by year-end.
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Now, let’s talk about Arizona Tax Credits. Arizona has a phenomenal program that benefits public and private schools, as well as organizations helping the poor. If you have state income tax liability, you can offset roughly $2,000 to $3,000 of that (depending on your filing status) by giving to a qualifying organization.
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You make the gift, and when you file your return, you get a dollar-for-dollar refund of your Arizona state taxes. For example, if your tax bill is $823 and you gave $823 to a qualifying charity, the state gives you that money back. It’s one of the best ways to support causes important to you without it costing you extra.
Standard Deductions and New Tax Laws
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There are some things you don’t need to do right now, but should think about for when you file next year. For instance, the bonus senior deduction: if you are 65 or older, you get an extra deduction ($6,000 for singles, $12,000 for married couples). This might give you more room to do a Roth conversion because you have that extra “shield” against your income.
Also, a new law passed regarding tip income—$25,000 of qualified tip income will now not be taxed. So, you can all send tips to my employees at Keystone Law Firm now! (Just kidding).
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There are also new exemptions for qualified overtime income ($12,500 for singles; $25,000 for married) and up to $10,000 of qualified vehicle loan interest deductions.
Regarding charitable giving changes for those who do not itemize: You can now take an additional deduction of up to $1,000 (single) or $2,000 (married) for charitable gifts.
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If you do itemize, the rule now states your charitable gift deduction is reduced by 0.5% of your Adjusted Gross Income (AGI). So, if a couple gives $5,000 to charity, they still include it in their itemized deductions, but it gets a small reduction based on that AGI percentage.
Gifting and Estate Planning
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This year, the gift limits are $19,000 per recipient, per giver, per year. If I give to one person, I can give $19,000 with no gift tax consequence. If my wife and I both give to that same person, we can give a total of $38,000. If we have four kids, we can give each of them $19,000 from each of us. You can move a lot of money this way.
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While giving cash is the simplest way, there are more strategic ways to package gifts if you are concerned about estate taxes. It’s likely too late for those complex strategies this year, but keep them in mind for the future.
Medicare and IRMAA Penalties
If you are on Medicare or will be soon, you need to know about IRMAA. This is a penalty premium assessed if your Modified Adjusted Gross Income (MAGI) exceeds certain limits. For this year, the limits are roughly $106,000 for an individual and $212,000 for a married couple.
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IRMAA can be triggered by selling stock, selling a rental property, or doing a large Roth conversion. If you are near those limits, see if you can pull in more deductions to stay below them. The penalty isn’t just for one year; it can affect you for multiple years.
Business Owner Strategies
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Regarding business owners, one of the biggest strategies is the 100% bonus depreciation. Instead of deducting the cost of large equipment over many years, you can often take the full deduction in the year you put the item into service.
00:25:10
Section 179 accelerated expensing is also a huge advantage for vehicles, office furniture, and equipment.
If your P&L is showing more net income than you’d like, try to defer revenue into next year. Tell your clients to pay you on January 1st. On the flip side, pay your January bills in December to get the deduction this year. Also, make sure your business-side 401(k) or SEP IRA contributions are fully funded before year-end.
Rental Property Owners
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If you own rental property, make sure you are documenting the difference between repairs (which are expensed now) and improvements (which must be depreciated).
If you can document that you are an “active participant,” you may be able to use rental losses to offset other income. If your activities are “passive,” look for ways to net your passive losses against passive gains.
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Another idea: can you pay family members (like kids in lower tax brackets) to help manage or maintain the property? That becomes a deduction for you and low-tax income for them.
Also, look into a cost segregation study. This allows you to break down a property into components (like water heaters or cabinets) that can be depreciated much faster than the standard 27.5-year schedule. This can result in a massive deduction in a single year.
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Finally, expense everything: mileage, home office, bookkeeping, legal fees, software, and insurance. Every dollar you expense directly offsets your rental income.
Q&A and Closing Remarks
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Sue (from chat): Can you touch on more desirable ways to do gifting other than cash?
Francisco Sirvent: There are complex ways to do this, such as using a Family Limited Partnership. You can move a brokerage account into a specific structure and gift “shares” of that account. Because those shares have rules—like the recipient can’t spend it or change investments—the “value” of the gift can actually be discounted for tax purposes. This allows you to effectively move more than $19,000 of value out of your estate while staying within the $19,000 IRS limit.
00:36:42
Alexis (correction): My webinar is on January 14th at 4:00 PM, not the 2nd.
Francisco Sirvent: Thank you, Alexis! January 14th is the date for the “Too Rich for Medicaid?” webinar.
Jean (from chat): Can you just pay for someone’s expenses and not have it count toward the gift limit?
Francisco Sirvent: If you are paying someone else’s expenses, it is considered a gift by the IRS and will fall within that $19,000 annual limit.
00:38:05
Before we go, I’ve dropped the link to our YouTube channel in the chat. Please click that and hit subscribe! It helps the algorithm put this information in front of more people.
It looks like we are all out of questions. Have a wonderful end of the year. Merry Christmas, Happy Hanukkah, and Happy Holidays!
