Keystone CPAs-
A Better Way to CPA
Market Highs Are Great But Are You Ready for the Tax Impact?
The stock market has been booming, pushing portfolios and business values to record levels. While this growth is great for your financial position, it can also mean increased tax liabilities if left unplanned.
If your investments or business assets have grown, it’s important to understand how capital gains, asset appreciation, and other market-driven income events could affect your 2025 taxes. Even better, there are steps you can take now before year-end to reduce your tax burden and keep more of what you have earned.
Keystone CPAs-
A Better Way to CPA
Market Highs Are Great But Are You Ready for the Tax Impact?
The stock market has been booming, pushing portfolios and business values to record levels. While this growth is great for your financial position, it can also mean increased tax liabilities if left unplanned.
If your investments or business assets have grown, it’s important to understand how capital gains, asset appreciation, and other market-driven income events could affect your 2025 taxes. Even better, there are steps you can take now before year-end to reduce your tax burden and keep more of what you have earned.
Where Gains Can Trigger Taxes
Many clients are seeing growth in areas like:
When you sell appreciated assets, you will likely owe capital gains tax, up to 20 percent federally, plus a 3.8 percent Net Investment Income Tax (NIIT) and any state taxes. But watch out, even if you don’t sell, some events can still trigger taxable income, such as:
- Capital gains distributions from funds or brokerage accounts
- RSU vesting or ISO exercises
- Liquidity events or partial buyouts of business interests
Failing to plan for these can lead to surprises during tax season.
What You Can Do Before Year-End
The good news is you still have time to take action and reduce your tax liability:
- Offset gains by selling other investments at a loss (tax-loss harvesting)
- Donate appreciated assets directly to charity or donor-advised funds to avoid capital gains tax and get a deduction
- Shift income or deductions depending on your expected 2025 tax bracket
- Explore installment sales or long-term exit planning for your business
- Take advantage of the Qualified Small Business Stock (QSBS) exclusion if you qualify
Each of these strategies has specific rules, so it’s important to work with your Keystone CPA to make the best plan for your unique situation.
Don’t Forget About Estimated Taxes
Big gains or spikes in income can throw off your quarterly estimated tax payments. Even if you plan to pay your full tax bill by April, the IRS may charge penalties if your estimates are too low during the year.
Make sure your estimated payments are on track to avoid unexpected penalties.
Why Now Is the Time to Act
Waiting until tax season is risky. A year-end review now helps you:
- Identify potential tax triggers
- Put strategies in place before it is too late
- Avoid IRS penalties for underpayment
- Align your tax approach with your financial goals
Let’s Make a Plan
If recent market activity or business growth has changed your financial picture, now is a good time to review your tax situation.
Our team can help you identify opportunities and develop a plan to manage your tax exposure effectively.
Schedule time to talk with someone from our team to discuss your year-end tax planning.