Financial Strategies for Year-End Preparation - The article emphasizes the importance of taking financial actions before the end of the year to alleviate stress during the holiday season and prepare for 2026 [1][2]. Tax Strategies - Harvesting tax losses is recommended, especially in September, which is typically a weaker month for stock performance. Losses can offset capital gains and reduce overall tax bills, with up to $3,000 in excess losses applicable to ordinary income [3]. - It is crucial to avoid wash sales when harvesting tax losses, which occur if a substantially identical security is purchased within 30 days before or after the tax loss is taken [3]. Retirement Contributions - Maximizing contributions to retirement accounts, such as 401(k) plans, is advised before year-end. Contributions made before the end of the year count for the 2025 tax year [4]. - For individuals aged 60 to 63, the catch-up contribution limit increases to $11,250 for 2025, allowing for significant boosts to long-term account balances if spread out over the remaining months [5]. Portfolio Management - Portfolio rebalancing is suggested as a proactive measure, even before year-end. A review of the portfolio can help ensure alignment with investment goals, especially after significant market gains [6][7]. - Given the stock market's performance, with gains exceeding 20% in the past two years and a year-to-date return over 13% as of mid-September, reallocation may be beneficial to mitigate risks from potential market corrections [7]. Income and Capital Gains Monitoring - Monitoring income levels is important, particularly in low-income years, as this may present opportunities to realize capital gains at a lower tax rate. Some taxpayers may qualify for a 0% rate on long-term capital gains depending on their taxable income [8].