Tax season is over, but smart financial planning never stops. Now is the perfect time to review your finances, optimize your strategies, and set yourself up for a smoother, less stressful tax season next year. Here are what working individuals or those nearing retirement should consider in the areas of open enrollment, savings, investments, and taxes.

Health and Benefits at Open Enrollment

Maximize Your HSA

If your employer offers a Health Savings Account (HSA)-eligible health plan, consider enrolling and contributing the maximum allowed for 2025 (limits are $4,300 for singles and $8,550 for families, plus an extra $1,000 per spouse over age 55 by 12/31/25). HSA contributions reduce your taxable income, saving you on federal, state, Social Security, and Medicare taxes. To ensure you claim this deduction correctly, report contributions accurately on Form 8889 when filing your 2025 taxes—missed deductions here are surprisingly common.

HSA and Medicare: Know the Rules

If you’re turning 65 in 2025 and enrolling in Medicare, stop contributing to your HSA. While you can keep your HSA after you retire, your contribution limit is reduced based on the number of months you’re Medicare-eligible. If you’re over 65 and retire this year, you’re ineligible to contribute to your HSA for the six months before enrolling in Medicare (but not before age 65). Plan accordingly to avoid penalties.

Reassess Employer-Sponsored Life Insurance

Check your paystub for life insurance deductions. Many employer-sponsored plans are annual, renewable term policies, meaning premiums rise as you age. You may save money by purchasing a 30-year term life insurance policy independently at a fixed, lower rate.

Savings Strategies for 2025

Roth IRA Contributions

Consider contributing to a Roth IRA for 2025, but only if your income falls below the 2025 limits ($165,000 for single filers, $246,000 for married couples filing jointly). Income from restricted stock units (RSUs), bonuses, or other sources could push you over these thresholds, so plan carefully.

Nondeductible IRA Contributions

If your income exceeds Roth IRA limits and you don’t have an existing IRA (including a SEP or a SIMPLE IRA), you can make a nondeductible IRA contribution (up to $7,000 in 2025; $8,000 if you are over age 50 by 12/31/25). Report this on Form 8606 when filing your taxes. Be meticulous—self-prepared returns often get this wrong, leading to missed tax benefits.

Boost Your 401(k)

Maximize your 401(k) contributions for 2025: up to $23,500 for those under 50, $31,000 for those 50 and older, and $34,750 for those ages 60–63 by 12/31/25. These contributions lower your taxable income and build your retirement nest egg.

Investment Planning

Exercise and Sell Employer Stock

If you receive stock options or RSUs from your employer, avoid holding these shares long term. Your income is already tied to your employer—don’t let your net worth be too. Sell the stock as soon as you’re eligible to minimize taxable gains and diversify your portfolio.

Beware Collectibles (especially gold)

Investing in gold, silver, or other collectibles (including those owned in ETFs) may seem appealing, but long-term capital gains on these assets are taxed at up to 28%, compared to 15% for stocks. Factor this into your investment decisions.

Explore Roth IRA Conversions

Partial Roth IRA conversions can be an effective retirement tax strategy for high-income earners, helping to reduce your lifetime tax burden by shifting taxable income to lower-tax years. Work with a financial advisor to determine whether this strategy fits your situation.

Harvest Capital Gains

If your income is low enough in 2025, you may be able to sell investments and realize capital gains tax free. Review your portfolio and income projections to seize this opportunity.

Review Your 2024 Tax Return

Even if you used a CPA or tax software, errors can slip through, especially as your financial situation grows complex (e.g., backdoor Roth IRAs, rental properties, stock options, RSUs). A thorough review can save thousands in unnecessary taxes. Here are real mistakes we’ve caught this year:

• Backdoor Roth IRAs misreported as taxable distributions
• Missed foreign tax credits on international investments
• RSUs taxed on an incorrect cost basis due to missing supplemental data
• Securities lending income reported on Schedule C, triggering self-employment tax
• No depreciation claimed on rental properties
• Passive real estate losses claimed when income was too high
• IRA basis ignored, inflating taxable income from Roth IRA conversions
• SE 401(k) deferrals mistaken for SEP IRA contributions
• Missed energy credits, late K-1s, missing Form 8606 reporting Roth IRA conversions, and unreported investment 1099s
• New Hampshire residents working in Massachusetts reporting investment income on Massachusetts returns

Tax season is chaotic, and mistakes are common. A second set of eyes—ideally from a financial advisor—can catch errors before they cost you.

Partner with a Financial Advisor

Taxes and financial planning are complex, but you don’t have to navigate them alone. A financial advisor can help you stay informed about tax law changes, optimize your savings and investments, and avoid costly mistakes. If you need tailored guidance, our team is here to help. Reach out to one of our advisors at (603) 589-8010 to integrate tax planning into your comprehensive financial strategy.