Financial Moves to Consider by Year-End
Thomas Mellum is a financial advisor at Cornerstone based in Reno, NV. Recognizing that no two financial situations are the same, Thomas is committed to creating thoughtful strategies that support clients in reaching both their short- and long-term financial goals. His approach centers on gaining a clear understanding of each client’s unique needs and building solutions that guide them toward lasting success.
FINANCIAL MOVES TO CONSIDER BY YEAR-END
As we move into the fourth quarter of 2026, many individuals begin to consider what financial actions can be taken prior to December 31st. The end of the calendar year signifies a fresh start, but it also marks the deadline for several tax-planning strategies and the window of opportunity to take action closes. Some key areas to evaluate include Roth conversions, Required Minimum Distribution (RMD) planning, beneficiary reviews, and tax-loss harvesting. But do not wait until December 30th to think about these items. Plan ahead to give yourself sufficient time to execute these strategies effectively before year-end.
Roth Conversions
Roth conversions are an item that your advisor should be discussing with you, regardless of whether they are ultimately completed. Roth conversions involve moving funds from a tax-deferred account (such as a Traditional IRA) into a Roth IRA. Because the converted amount is generally treated as taxable income in the year of the conversion, it is essential to evaluate how this extra income affects your overall tax situation. A conversion could potentially bump you into a higher federal or state tax bracket or trigger higher Medicare premiums through Income-Related Monthly Adjustment Amounts (IRMAA). Evaluating whether you have remaining room within your target tax bracket is a key conversation to have with your financial and tax advisors before year-end.
Required Minimum Distributions (RMDs)
Required Minimum Distributions (RMDs) are mandatory withdrawals the IRS requires you to take once you reach a certain age (if born between 1951 and 1959, it is age 73; if born on or after 1960, it is age 75). An individual may incur IRS penalties for taking out less than required from their total balance of pre-tax accounts in a given year. Additionally, RMDs cannot be converted to a Roth IRA. As an example, if an investor is required to take out $10,000 from their IRA this year, that amount must be taken as a distribution first and cannot be converted directly into a Roth to satisfy the RMD. The IRS mandates that RMDs be satisfied prior to performing a Roth conversion in a given year. Confirm with your custodian or advisor that all RMDs for the year have been calculated and processed accurately.
Beneficiary Designations Review
Beneficiary designations on taxable accounts, managed accounts, annuities, and life insurance policies are always prudent to review and update as soon as necessary. Because beneficiary designations generally supersede instructions written in a will or trust, keeping these designations up to date ensures your assets pass according to your current wishes following major life events; such as, marriage, divorce, births, or deaths. It is encouraged to confirm beneficiary designations are set accordingly by contacting your advisor or accessing your respective online portals.
Tax-Loss Harvesting
Tax-loss harvesting involves selling taxable investments at a loss in order to generate a capital loss. These realized losses can be used to offset realized capital gains from other investments sold during the same tax year, or up to $3,000 of ordinary income ($1,500 if married filing separately), with excess losses carried forward to future years.
Similar to a Roth conversion, if an investor wishes to change strategies or rebalance an account but has large capital gains, there are a few things to consider. First, can any losses offset a portion of the gains to maintain comfortable tax and IRMAA brackets? When evaluating, be sure to keep the IRS Wash-Sale Rule in mind, which disallows tax losses if ‘substantially identical’ securities are repurchased within 30 days before or after the sale. Next, are there plans to retire next year or have less income, and thus, more room to realize capital gains, potentially paying a lower tax rate in the process? Finally, would selling poor performing stocks help offset some already realized capital gain tax for the current calendar year? Your advisor and tax professional should be able to strategize with you about how tax-loss harvesting fits into your plan.
Where to Go From Here
Year-end financial planning is not a one-size-fits-all process, nor is it something to rush at the last minute. Whether you are managing RMD deadlines, evaluating a Roth conversion, updating beneficiary designations, or harvesting capital losses to manage your tax burden, each of these strategies requires careful coordination. Taking a proactive approach before December 31st gives you the necessary time to weigh trade-offs and make informed choices aligned with your long-term goals. If you would like to review your overall financial picture and ensure your year-end strategy is properly positioned for the year ahead, call our office today at (775)853-9033 or click here to schedule a meeting with our advisory team.
Based in Reno, NV, Prime Capital Financial is for individuals and families looking to grow wealth, protect and preserve their life savings, and plan for the distribution of their estate in a tax-efficient manner through a tailored strategy. Schedule a time to discuss your financial goals with us.
©2025 Prime Capital Financial. The views and information contained herein are (1) for general educational or informational purposes only, (2) are not to be taken as a recommendation to buy or sell any investment, and (3) should not be construed or acted upon as investment or tax advice. The information contained herein was obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. This information does not constitute legal advice. Prime Capital Financial and its associates do not provide legal advice. Individuals should consult with an attorney regarding the applicability of this information for their situations.