Unwrapping the OBBBA: 5 Year-End Tax Opportunities Before 2026
By Steve Contreras
As the year winds down, several provisions of the One Big Beautiful Bill Act (OBBBA) are scheduled to take effect in 2026. These changes will alter how charitable giving, itemized deductions, SALT payments, AGI-based benefits, and retirement strategies interact. That makes 2025 the final year to take advantage of certain opportunities before the new rules narrow or phase out benefits.
Below are five year-end moves to consider:
1. Consider Accelerating Charitable Gifts Before the New AGI Floor Begins
Starting in 2026, charitable deductions will apply only to the portion of giving that exceeds 0.5% of AGI. Contributions made in 2025 avoid this floor entirely and remain fully deductible under current rules. A key nuance: if a 2025 gift creates a carryforward used in 2026 or later, that carryforward will likely be subject to the new 0.5% floor in the year it is applied. By contrast, carryforwards generated in 2026 and later that are disallowed solely due to the floor are added back and not subjected to it again. This makes 2025 the most advantageous year for securing current charitable deductions, even though unused amounts may still face future limitations.Planning Tip: If you plan to give in 2026, consider making the gift this year to preserve full deductibility under 2025 rules.
2. Evaluate Whether Prepaying SALT Obligations Could Benefit You in 2025
Beginning in 2025, the SALT deduction cap increases from $10,000 to $40,000 for joint filers (and $20,000 for separate filers) and then grows by 1% annually through 2029 before reverting to $10,000 in 2030. The expanded cap begins phasing down once MAGI exceeds $500,000 for joint filers, making timing important for many households.Planning Tip: If your MAGI is below the $500,000 phase-out, review state estimates and property tax bills now – prepaying in 2025 may maximize the expanded SALT deduction.
3. Review Itemized Deductions to See if Bunching Makes Sense in 2025
In 2026, itemized deductions will no longer offset tax at the full marginal rate for high-income taxpayers. Bunching deductible expenses into 2025 may increase the value of deductions before the new limitation takes effect.Planning Tip: If you are close to itemizing, bunching expenses like property taxes or medical costs into December 2025 may produce more value than waiting until 2026.
4. Assess 2025 Income Levels if You Qualify for the New Senior Deduction
A new deduction of up to $6,000 per taxpayer aged 65 or older (or $12,000 per couple) begins in 2025, phasing out as AGI rises. Because retirement income can vary from year to year, establishing a stable AGI in 2025 may help preserve the full deduction.Planning Tip: Seniors should project 2025 AGI and time income events carefully – acting this year may preserve the full deduction before phase-outs apply.
5. Decide Whether to Complete Roth Conversions or Realize Gains While 2025 Rules Still Apply
Once the OBBBA changes begin in 2026, new deduction floors, phase-outs, and interaction rules may complicate Roth conversions, RMD planning, and capital-gain strategies. Acting in 2025 allows taxpayers to work within a familiar, more predictable framework.
Planning Tip:
If you’re considering a Roth conversion or realizing gains, assess whether completing it in 2025 yields a better outcome under current rules.
How Keystone Can Help:
As everyone looks ahead to 2026, the OBBBA introduces new rules that will affect a wide range of taxpayers in different ways. Keystone helps individuals, families, and businesses understand how these changes may influence their income, deductions, charitable giving, and overall tax planning. We work with you to identify which decisions made in 2025 can still offer meaningful benefit and how to prepare for the new framework that begins next year.
Our goal is simple:
To help you move into the new year informed, confident, and ready for whatever comes next.If you would like help reviewing your 2025 tax picture or modeling the impact of next year’s rules, Keystone is here to support you.