Year‑End Tax Strategies: A Practical Checklist

As the end of December approaches, here are key tax‑saving moves to review and complete before year‑end.

Make Charitable Contributions

• Individuals may generally deduct charitable gifts up to 50% of their adjusted gross income.
• Donate unused household items or clothing to qualified charities; keep receipts, canceled checks, and any acknowledgment letters.
• To claim a deduction for the current year, mailed checks must be postmarked by December 31. Checks placed in an offering plate after year‑end do not qualify, even if pre‑dated.
• Donated property must be in “good used condition.”
• Non‑cash donations totaling $500 or less do not require IRS Form 8283. Items valued at $500 or more may require an appraisal. (See IRS Publication 526.)

Prepay State and Local Taxes

Pay any state or local income taxes before December 31 so they can be deducted this year. Payments made by check or credit card before year‑end qualify.

Review Your Housing Allowance

If your year‑to‑date housing expenses meet or exceed your designated allowance, consider adjusting the allowance before the next pay period. Housing allowances can be amended during the year, but not retroactively.

Contribute to Retirement Accounts IRAs

2025 IRA Limits

• Regular contribution limit: $7,000
• Catch‑up contribution (age 50+): $8,000 total (regular $7,000 + $1,000 catch‑up)

2026 IRA Limits

• Regular contribution limit: $7,500
• Catch‑up contribution (age 50+): $8,600 total (regular $7,500 + $1,100 catch‑up)
• IRA contributions can be made up to April 15 of the following year.

Review Your Medical Deductions

Medical expenses are deductible only to the extent they exceed 7.5% of adjusted gross income. If you’re close to the threshold, consider scheduling additional appointments before year‑end. Some taxpayers benefit from “bunching” medical expenses into a single year.

Understand What Medical Expenses Are Deductible

See IRS Publication 502 for a full list.

Harvest Investment Losses

If your portfolio includes underperforming stocks or mutual funds, you may sell them before year‑end to realize losses and offset taxable income.

Use Up Flexible Spending Accounts (FSAs)

Spend remaining FSA funds before year‑end unless your plan offers a grace period. Eligible expenses include more items than many realize, such as contact‑lens solution and acupuncture. Note: Over‑the‑counter medications generally require a doctor’s prescription to be reimbursed.

Make Annual Gifts

You may give up to $19,000 per recipient each year without gift tax. Gifts may include cash, securities, or property; the recipient assumes your cost basis.

Contribute to 529 College Savings Plans

Make contributions before December 31 to qualify for any available state tax benefits. While there is no federal deduction, earnings grow tax‑free when used for qualified education expenses.

If you need guidance that is tailored specifically to your unique situation, we encourage you to connect directly with Pro Advisor Support. Their experienced team specializes in assisting clergy and church organizations with complex tax, payroll, bookkeeping, and HR matters. Whether you have detailed questions about compliance, deductions, or planning strategies, they can provide expert advice and walk you through the next steps with clarity and confidence.

Clergy Financial Resources
Tax I Payroll I Bookkeeping I HR | Consulting
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421.0101

Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com