Gartenberg’s Year-End Playbook: Practical Moves to Trim Taxes and Reset Your Portfolio Before the calendar flips

Why Gartenberg is urging action now: a short window and shifting tax math

Jennifer Gartenberg of Mesirow Wealth rolled out a tidy year-end checklist with a clear message: there are a few simple, time-sensitive moves investors should consider before the books close. The reason is plain — year-end is when tax rules, account deadlines and market gains meet. What you do now determines what shows up on next year’s tax return and how much you hand over to Uncle Sam.

That urgency is stronger this year because the tax landscape is in flux. Some familiar rules and generous allowances are set to change in the coming years, and legislative momentum can make this December a last chance for certain benefits under today’s rules. That doesn’t mean sweeping action for everyone, but it does make a short checklist useful: tidy up charitable giving, think about harvestable losses, tidy up college-savings moves, and line up any big contributions before December 31.

Smart charitable moves to maximize tax benefits this year

Gartenberg highlights three easy tools that keep giving flexible while improving tax outcomes.

Donor-advised funds (DAFs): Put money into a DAF now, get a tax deduction this year, and decide which charities receive grants later. This is useful if you want the deduction in the current tax year but prefer time to choose beneficiaries. The deduction works best if you itemize; if you don’t, a DAF can be part of a bunching strategy (see below).

Bunching donations: Instead of giving the usual small amounts each year, concentrate two or three years’ worth of planned gifts into a single year so your total exceeds the standard deduction and becomes deductible. That can make sense for households close to the threshold and is a practical way to use a DAF: make a larger DAF contribution now, claim the deduction, and distribute grants over future years.

Qualified charitable distributions (QCDs) from IRAs: If you already take required IRA distributions, a QCD lets you have the IRA send money directly to a charity. That transfer can count toward your required withdrawal but is excluded from taxable income — which helps if you’d otherwise be pushed into a higher tax bracket. Check the age and account rules that apply to QCDs for eligibility.

Timing tip: gifts must clear the charity or DAF by December 31 to count for this tax year. If you’re mailing a check, allow extra time for processing; online or ACH transfers are usually faster.

Rebalance now? How to capture gains and limit tax drag

After a long run-up in stocks, many portfolios are off target. Gartenberg’s note stresses that rebalancing is as much about risk control as tax control — but timing and tax rules matter.

Tax-loss harvesting: If you own positions that are down, selling to realize losses can offset gains elsewhere and reduce taxable income. The core rule to remember is the wash-sale restriction: if you sell a security for a loss, you can’t buy a “substantially identical” security within the 30 days before or after the sale without losing the tax benefit. That effectively creates a 61-day window when you need to avoid repurchasing the same holding.

Where to buy a replacement: If you want to stay invested while avoiding the wash-sale rule, pick a similar but not identical ETF or mutual fund, or use cash and repurchase after the wash-sale window closes. Alternatively, tax-advantaged accounts don’t trigger wash-sale rules the same way, so moving exposure between account types can be part of the plan — but the rules are complex.

Harvest gains when it makes sense: If you’re in a low-income year or have large capital losses carried forward, realizing gains now at a low effective rate can be sensible. Gartenberg points out that small, planned sales to restore target allocations can be a sensible middle ground — you lock in gains but control when and how much tax you owe.

Operational tips: do trades early enough to settle before year-end, beware of thinly traded securities around holidays, and keep an eye on dividend and distribution schedules that can change tax timing.

Using 529 plans before year-end: contributions and state tax angles

529 college-savings plans are a year-end favorite for families. Contributions grow tax-free for qualified education uses, and many states offer a tax deduction or credit for contributions made by December 31. Gartenberg highlights two practical points.

Gift-tax five-year election: You can front-load up to five years’ worth of the annual gift-tax exclusion into one 529 contribution by filing the special election on your gift-tax form. That lets you accelerate estate and gift-tax planning while still keeping the contribution in a tax-advantaged wrapper.

State rules vary: Some states cap deductions, others don’t. If you or the student live in a state that offers a deduction, making the contribution before year-end can save state tax this year, making the net cost of funding the 529 lower. Also consider coordination with other scholarships or expected financial aid — overly large 529 balances can affect aid calculations.

A prioritized, time-sensitive checklist investors can act on now

This is a short, ordered playbook Gartenberg would likely recommend for a typical taxable investor with moderate complexity.

• This week: review your tax bracket outlook and estimate capital gains/losses for the year. Identify any losers to harvest and winners you might realize if your income is unusually low.
• Within two weeks: set up or fund a DAF if you plan to bunch donations, and confirm charities have received any checks you mailed. For 529 credits, confirm state deadlines and funding limits.
• Before Dec. 31: complete any IRA-to-charity QCDs that count this year, finish trades so they settle on time, and lock in any contributions you want claimed this tax year.
• If your situation is complex — large gains or losses, estate concerns, trust or business issues — consult a tax professional or wealth advisor now to model outcomes and avoid last-minute surprises.

Gartenberg’s checklist is modest by design: it focuses on moves that are legal, well-understood and time-sensitive. For investors who act with a calm plan rather than clutching at last-minute fixes, these steps can save tax, reduce future headaches and reset your portfolio for the year ahead.

Sources

• prnewswire.com