Donald Hayden | Innovative Finance Leader & Strategic Partner for Business Growth

02 Dec 2025

Introduction

As you head into the year-end, now is the perfect time to sharpen your tax strategy and put proactive measures in place. Whether you’re enjoying retirement or nearing that milestone, taking action on key tax moves before December 31 can help protect your income, reduce your tax bill, and set you up for a smoother 2026. Retirees face a unique tax landscape—including required minimum distributions (RMDs), Roth conversion decisions, and the impact of new tax rules.
In this article, we’ll walk through 10 strategic actions you should consider to stay ahead of tax issues, plus practical steps you can take right away.

1. Review Your RMDs (Required Minimum Distributions)

If you’re age 73 or older, you’re required to take minimum distributions from your Traditional IRAs, 401(k)s or other qualified plans. Missing your RMD deadline—or delaying a first RMD into April of the following year—can trigger significant tax consequences, including being pushed into higher tax brackets.
Action step: Verify how much you owe for 2025, check whether you’re on track or will need to take two distributions in one year, and plan accordingly.

2. Think About Roth Conversions

Converting Traditional IRAs or similar accounts into a Roth IRA can make sense if your taxable income is relatively low now but likely to increase later. Accelerating a Roth conversion now may lock in tax-free growth and ensure your future withdrawals won’t be taxed.
Action step: Review your projected income for the year to determine whether a Roth conversion makes sense before December 31.

3. Harvest Investment Losses (Tax-Loss Harvesting)

Tax-loss harvesting involves selling investments at a loss to offset capital gains in your taxable brokerage account. This is a powerful strategy to reduce your tax liability if you’ve realized significant gains this year.
Action step: Review your taxable investment accounts and identify any loss positions that may help offset this year’s gains.

4. Consider Converting a 529 into a Roth

Recent rule changes now allow some taxpayers to convert unused 529 plan funds into a Roth IRA under specific conditions. This can be a smart move if you have leftover education savings and want to redirect funds toward long-term tax-free retirement growth.
Action step: If you have unused 529 funds, confirm your eligibility and evaluate whether a conversion fits into your long-term tax plan.

5. Use Deduction “Bunching” to Your Advantage

If you itemize deductions, you may benefit from “bunching” — grouping large deductible expenses into a single year so you can claim itemized deductions one year and the standard deduction the next.
Action step: Consider prepaying charitable contributions, medical bills or property taxes before year-end if you expect to itemize.

6. Finish Charitable Contributions Before Year-End

Charitable giving remains one of the most flexible and tax-efficient strategies available to retirees. Completing your charitable contributions before December 31 ensures the deduction counts for this tax year.
Action step: Finalize your charitable giving plan, whether through direct donations, donor-advised funds or qualified charitable distributions (QCDs).

7. Update Retirement Income Withholding and Estimated Taxes

If you receive retirement income—such as pension payments, annuities or Social Security—your withholding may need updating to avoid under-payment penalties.
Action step: Review your year-to-date withholding and estimated tax payments. Make adjustments now to prevent surprises at tax time.

8. Review Your Healthcare Coverage During Open Enrollment

Medicare and marketplace plans often change from year to year. Comparing your choices during open enrollment ensures you’re receiving the best benefits for your health and tax situation.
Action step: Review coverage changes, plan costs and potential impacts to your taxable income or Medicare surcharges.

9. Revisit Your Estate Plan and Beneficiary Designations

Estate tax thresholds, gift limits and inherited IRA rules continue to shift. Reviewing your estate planning documents annually helps ensure your assets are protected and distributed according to your wishes.
Action step: Update wills, trusts, designations and powers of attorney. Confirm everything reflects your current life situation.

10. Lock in the Year-End Review (Make Tax Planning a Priority)

Waiting until tax season to make changes often results in missed opportunities. By taking action now, you maintain control over your income, deductions and tax exposure.
Action step: Schedule a year-end meeting with your tax professional and review all income sources, deductions and upcoming tax-law changes.

Conclusion

The end of the year is more than just a holiday season—it’s a strategic tax planning window. For retirees, the difference between acting now and waiting until filing season can significantly impact cash flow, taxes owed and long-term financial security. With the right guidance—and a proactive plan—you can turn year-end tax decisions into long-term advantages.

by Donald Hayden

02 Dec 2025

Introduction

A Roth IRA conversion 2025 is one of the top strategies for retirement planning this year. It involves moving money from a traditional IRA or 401(k) into a Roth IRA. The main advantage? Once the money is in a Roth, it grows tax-free and withdrawals in retirement are also tax-free.

Recent research shows that a one-time conversion may often outperform spreading the conversion over several years, which has many people rethinking their retirement strategies. In this guide, we’ll break down what a Roth conversion is, why it might make sense in 2025, the risks involved, and practical tips to make it work for you.

What is a Roth IRA Conversion?

A Roth IRA conversion is essentially a tax move. You take money from a pre-tax retirement account (like a traditional IRA or 401(k)) and move it into a Roth IRA. Because traditional accounts are funded with pre-tax dollars, the conversion amount is considered taxable income in the year you make the switch.

Once it’s in a Roth IRA:

The money grows tax-free
Qualified withdrawals in retirement are tax-free
There are no required minimum distributions (RMDs) during your lifetime

Think of it like paying the tax now so you don’t have to pay it later — and that future tax-free growth can be significant, especially if your investments continue to compound over decades.

Why a Roth Conversion Might Make Sense in 2025

1. Tax-Free Growth & Withdrawals

The biggest benefit of a Roth IRA is tax-free growth. Once your money is in a Roth, any earnings, dividends, or interest grow without being taxed. When you withdraw in retirement, you pay nothing — unlike a traditional IRA, where withdrawals are taxed as ordinary income.

Example:
Imagine converting $50,000 today, and over 20 years, it grows to $150,000. In a Roth, you pay zero tax on that $100,000 in gains. In a traditional IRA, that same $100,000 would be taxed at your retirement income rate.

2. No Required Minimum Distributions (RMDs)

Traditional IRAs require you to start taking distributions at age 73 (as of 2025 rules). Roth IRAs, on the other hand, have no RMDs during your lifetime, giving you flexibility to leave the money invested longer or pass it on to heirs.

3. Estate Planning Advantages

Roth IRAs are powerful estate-planning tools. Since withdrawals are tax-free, heirs can inherit your Roth IRA without facing huge tax bills. This can make a big difference in passing wealth efficiently to the next generation.

4. Tax Rate Arbitrage

The key to a smart Roth conversion is timing your taxes. If you anticipate being in a higher tax bracket in retirement, paying taxes now on the converted amount could save you money in the long run.

Example:
If you’re currently in a 22% federal tax bracket but expect to be in 28% in retirement, paying 22% now instead of 28% later can yield significant savings.

5. One-Time Conversion May Be Best

Data suggests that a full, one-time Roth IRA conversion may outperform spreading it out over multiple years, depending on your income and tax scenario. This approach can also simplify your tax planning and reduce uncertainty about future tax rates.

Risks and Key Considerations

While Roth conversions can be very beneficial, they are not without risks. Here’s what to keep in mind:

Upfront Tax Cost: Converting triggers a taxable event. Large conversions can push you into a higher tax bracket, so planning is critical.
Medicare IRMAA Impact: Higher income from a conversion can increase your Medicare Part B and D premiums.
Five-Year Rule: Each conversion has a five-year waiting period. Early withdrawals of converted amounts before five years may incur a 10% penalty if you’re under 59½.
Irrevocable Decision: Once converted, you cannot “undo” it. The option to recharacterize (undo) conversions was eliminated in 2018.
Pay Taxes from Outside Assets: Using the converted funds to pay taxes reduces the actual benefit of the conversion.

When a Roth Conversion Makes the Most Sense

Here are some scenarios where a Roth conversion is particularly advantageous:

You’re in a low-income year, making the tax hit more manageable
You expect higher tax rates in retirement
You have cash outside your retirement accounts to cover conversion taxes
You don’t need the money for at least five years, allowing it to grow in the Roth
You want to minimize RMDs and maximize legacy planning
You’re planning to move to a higher-tax state in the future

How to Do It Smartly

1. Run the Numbers

Before making a conversion, calculate the potential tax bill and compare it with the long-term benefit. Many financial planning tools or advisors can help model one-time vs. staggered conversions.

2. Phase Conversions If Needed

While one-time conversions often perform better, you can still spread the conversion over a few years to manage tax impact and stay in a lower bracket.

3. Time It With Income Dips

Years with unusually low income are ideal for conversions, since your taxable income will be lower, reducing the conversion’s tax burden.

4. Coordinate With Other Tax Moves

Combine your Roth conversion with strategies like charitable donations or harvesting investment losses to offset taxes.

5. Consult a Tax Professional

Roth conversions involve complex rules, including Medicare premiums, state taxes, and potential changes to federal tax law. Professional guidance can help avoid costly mistakes.

Practical Example of a One-Time Roth Conversion

Suppose Jane, age 55, has a traditional IRA with $200,000. She expects her tax bracket to rise in retirement. She decides to convert $100,000 in one year.

Current tax bracket: 22% → pays $22,000 in taxes this year
Future growth in Roth: tax-free for decades
Benefit: avoids higher taxes later and reduces future RMDs

By paying taxes now with cash outside her IRA, Jane maximizes the amount growing tax-free, leaving her more flexible in retirement.

Conclusion

A Roth IRA conversion can be a powerful strategy for retirement planning, offering tax-free growth, no required minimum distributions, and estate-planning advantages. While a one-time conversion often outperforms spreading conversions over time, it’s not a one-size-fits-all solution.

Carefully evaluate your current and expected future tax situation, cash flow needs, and retirement goals. By running the numbers and working with a qualified advisor, you can develop a Roth conversion plan tailored to your circumstances — one that may save you money and give you more flexibility for a comfortable retirement.

by Donald Hayden

02 Dec 2025

Intro

If you’re saving for retirement, 2026 brings important updates. The IRS has officially raised contribution limits for 401(k) plans, IRAs, and several other tax-advantaged retirement accounts. These higher limits create new opportunities to reduce taxable income, accelerate retirement savings, and take advantage of enhanced catch-up provisions. With thoughtful planning, these updates can make a meaningful difference in your long-term financial strategy.

What’s Changing for 2026

The IRS increased several key limits for the 2026 tax year.

The annual employee contribution limit for 401(k), 403(b), 457, and TSP plans rises to $24,500.
Traditional and Roth IRA contribution limits increase to $7,500.
Workers aged 50 and older may contribute an additional $8,000 in catch-up contributions.
Certain employees aged 60–63 may qualify for even higher “super catch-up” contributions depending on plan rules.

These adjustments offer more room for tax-advantaged growth and flexibility in retirement planning.

Why These Changes Matter for Tax Planning

1. Higher Tax-Deferred Savings Potential

The increased limits allow you to shelter more income from taxes. For high earners or those anticipating higher future tax rates, maximizing these contributions can significantly reduce long-term tax exposure.

2. Improved Catch-Up Opportunities

Individuals aged 50 or older now have greater opportunity to strengthen their retirement security through expanded catch-up allowances. This is especially important for those who may have started saving later in life.

3. Income Thresholds Still Apply

While limits increased, income-based rules such as Roth IRA phaseouts still determine eligibility. Higher earners may need alternative strategies, such as backdoor Roth contributions or coordinated employer plan strategies.

Key Factors for Business Owners and Self-Employed Professionals

Retirement strategies for business owners follow similar rules but with additional planning considerations:

Solo 401(k), SEP IRA, and SIMPLE IRA plans follow inflation-adjusted limits and often allow higher combined employer/employee contributions.
Total contributions to defined-contribution plans, including employer contributions, may rise significantly under 2026 limits.
Business owners must monitor compensation levels, plan participation rules, and coordination across multiple entities.

Strategic planning helps ensure contributions remain compliant while maximizing tax benefits.

What You Should Do Now

Here are practical steps to make the most of the new 2026 limits:

Review current contribution settings to determine whether adjustments are needed.
Evaluate catch-up eligibility if you are age 50 or above.
Coordinate employer and employee contributions if you own a business or are self-employed.
Monitor income levels to avoid unintended phaseouts or contribution restrictions.
Work with a tax professional to develop a personalized contribution strategy for 2026.

Small adjustments made early in the year can significantly improve your long-term retirement results.

Final Thoughts

The updated 2026 retirement contribution limits offer an opportunity to strengthen your financial future. Higher caps, enhanced catch-up options, and strategic tax planning work together to create a significant advantage for savers. Whether you are a high-earning professional, business owner, or someone preparing for retirement, understanding and leveraging these changes can help you build a more secure financial foundation.

by Donald Hayden

02 Dec 2025

Introduction

If you want to maximize charitable giving in 2025, now is the perfect time to review your donation strategy. With new tax rules taking effect in 2026, understanding how to consolidate gifts, use donor-advised funds, and monitor adjusted gross income can ensure you get the most from your philanthropy.

Understand the 2026 Deduction Cap Changes

Starting January 1, 2026, new regulations will limit tax deductions for charitable contributions:

Floor on itemized deductions: Donations at or below 0.5% of adjusted gross income may no longer qualify for deductions.
Cap for top tax bracket: Itemized charitable donations for filers in the 37% bracket will be capped at 35%.
Universal deduction for non-itemizers: Single filers can claim up to $1,000; married couples up to $2,000, excluding donor-advised funds and private foundations.

These changes make it essential to plan your charitable gifts strategically before 2026.

Strategies to Maximize Charitable Giving in 2025

Consolidate Multiyear Gifts
Instead of spreading donations over several years, consider consolidating them into 2025. This ensures your contributions fall under the current deduction rules, maximizing tax benefits.
Prefund Donor-Advised Funds (DAFs)
Setting up or adding to a DAF before 2025 ends can allow multiple years of donations to qualify under the 2025 deduction limits, even if they are distributed to charities over time.
Monitor Adjusted Gross Income (AGI)
Since deductions are tied to AGI, major financial events—like business sales or investment gains—can affect the tax benefits of your charitable contributions. Plan gifts strategically to optimize deductions.

Why Timing Matters

With these new rules in effect starting 2026, smaller or routine donations may no longer provide the same tax advantage. Acting before December 31, 2025, ensures your generosity has the maximum impact both for your favorite causes and your tax planning.

Final Thoughts

By taking proactive steps now, you can maximize charitable giving in 2025, enjoy the associated tax benefits, and make a meaningful difference in the causes you support. Review your donation plans, consider consolidating gifts, and leverage donor-advised funds to optimize your philanthropy before the new rules take effect.

by Donald Hayden

02 Dec 2025

Introduction

Starting 2025, several new tax-deduction opportunities are catching the attention of many taxpayers — especially those earning tips or overtime, or considering a new car loan. These changes could mean real savings for the right people. In this blog, we break down what’s new, who stands to benefit, and what to watch out for.

What’s New in the 2025 Tax Landscape

Tips & Overtime — More Than Just Extra Pay

Under the new law, workers who earn tips or overtime may qualify for deductions on a portion of that income:

For overtime: eligible amounts beyond the regular rate-of-pay may be deductible — up to defined limits.
For tipped workers: qualified tips may also be deductible under certain conditions.

That means extra pay from late nights or busy weekends could come with extra savings — as long as you meet eligibility requirements.

Car-Loan Interest Break — Buying a New Ride Might Save on Taxes

Another part of the law aims to help buyers of eligible vehicles. If you took out a loan for a qualified, newly purchased car (assembled in the U.S.), you may be able to deduct some or even all of the interest you pay — potentially reducing your taxable income for 2025–2028.

But there are conditions. Factors like income level, vehicle eligibility (new cars, U.S.-assembled), and loan terms matter before you can claim this break.

Who Benefits — And Who Might Not

These deductions are promising — but they don’t help everyone equally. Here’s when they make sense:

Middle to upper-middle income earners — People whose incomes are high enough to pay taxes, but not so high that their deductions are phased out. If your income is too low, deductions may not offer much benefit.
Employees with consistent overtime or tips — If your earnings frequently include overtime or tips, the deductions can add up.
Buyers of a new, eligible vehicle with a loan — Those planning to purchase a U.S.-assembled car could benefit from the car-loan interest deduction — depending on loan size, interest paid, and income limits.

On the flip side: low-income workers, or those with inconsistent extra pay, might see limited benefits; high-income earners may hit phase-out thresholds, reducing or eliminating the deductions.

What to Watch Out For — Before You File

Temporary provisions — Many of these deductions are valid only for a few years (e.g. 2025–2028). So timing matters.
Reporting accuracy matters — For overtime and tips deductions: pay must be properly reported (on W-2, 1099 or other statements) for eligibility.
Income limits and phase-outs apply — Deductions phase out at certain income thresholds, which affects benefit amounts.
Car eligibility is strict — Deductions for car-loan interest apply only to certain vehicles (e.g. U.S.-assembled, new, personal-use, below certain weight), and loan interest may need to meet specific criteria.

What You Should Do Now — A Quick Action Plan

Check your income level and pay structure: If you earn tips or overtime regularly, run a quick estimate to see if deductions help.
If buying a car — check eligibility: Make sure the vehicle and loan qualify before counting on tax benefits.
Keep detailed records and documentation: Pay stubs, loan paperwork, W-2s/1099s — save everything relevant.
Crunch the numbers — maybe with a tax pro: Because deductions phase out and have caveats, it’s smart to model potential savings vs. income level and loan details.
Plan early: Since many deductions are temporary (2025–2028), planning now could help maximize benefits while they last.

Final Thoughts

The 2025 tax law changes around overtime, tips, and auto-loans could offer meaningful financial relief to many Americans — especially those working hourly, earning tips, or financing a new vehicle. But they aren’t guaranteed windfalls. Their value depends heavily on your income, job type, and how carefully you document everything.

If you meet the conditions and plan carefully, these deductions might help you keep more of what you earn — and make major expenses like a car purchase more tax-efficient.

by Donald Hayden

01 Dec 2025

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Owning a business is one of the most rewarding ways to build wealth—and one of the easiest places to lose it to unnecessary taxes. From choosing the wrong entity to neglecting succession planning, small missteps can cost families a significant portion of their hard-earned legacy.

by Donald Hayden

26 Nov 2025

Introduction

If you’ve been using or considering a 529 plan to save for college, there’s good news: 529 plans 2025 have become more flexible than ever. New updates now allow families to use these savings for a wider range of educational and career-related expenses — far beyond traditional college tuition. In this blog, we’ll break down the new rules, what changed, and how you can make the most of your 529 funds.

What Has Changed with 529 Plans

Expanded Use for Vocational, Licensing & Credentialing Programs

Traditionally, 529 funds covered college tuition, books, room, and board.
Recent updates now allow 529 plans to be used tax-free for non-degree credential programs under the Workforce Innovation and Opportunity Act (WIOA). This includes vocational training, trade schools such as HVAC, plumbing, welding, and certification or licensing programs — including tuition, books, equipment, and exam fees.

Expanded Support for K–12 and Private School Tuition

Beginning in 2026, families will be able to withdraw up to $20,000 per beneficiary annually for K–12 tuition — double the previous $10,000 limit.
This makes 529 plans more practical for private school or other pre-college educational expenses.

New Option: Rollover to a Roth IRA

Thanks to the SECURE 2.0 Act, leftover 529 funds can now be rolled into a Roth IRA.
Up to $35,000 (lifetime limit) can be transferred if the account is at least 15 years old and meets contribution timing rules.
This offers a powerful second use for unused education savings — turning them into tax-free retirement funds instead of facing penalties.

More Beneficiary Flexibility

Families now have even greater freedom to reassign the beneficiary without tax penalties.
If the original beneficiary earns scholarships, skips college, or doesn’t need the full amount, funds can be easily transferred to another qualifying family member.

Why the Changes Matter — and Who Benefits

Families pursuing trade or vocational careers
Parents with children in private schools or alternative education
Savers with leftover 529 funds they want to repurpose
Families planning for multiple children or multi-generation education

These changes make 529 plans far more adaptable, allowing families to support diverse educational and career paths, while still maximizing tax advantages.

Important Considerations

State rules may differ from federal rules, so check your state’s 529 plan guidelines.
Roth IRA rollovers require the 529 account to be open for at least 15 years, and certain contributions must meet timing rules.
Annual and lifetime limits apply for tuition withdrawals and rollovers.
Keep receipts and documentation for all educational expenses to ensure they qualify.

How to Maximize the New 529 Plan Benefits

Review your beneficiary setup and update if needed.
Plan ahead for vocational training, certifications, or licensing programs.
Consider future Roth IRA rollovers if traditional college is unlikely.
Use the increased K–12 tuition limit strategically.
Double-check your state’s rules before making withdrawals.

Conclusion

The new 2025 updates to 529 plans open the door to more opportunities and flexibility than ever before. Whether you’re preparing for college, trade school, licensing programs, private school tuition, or even retirement savings, the expanded 529 plan rules help you make the most of every dollar.

With proper planning and awareness of state and federal guidelines, 529 plans can provide long-term value and support for your family’s educational and financial goals.

by Donald Hayden

14 Nov 2025

Protecting Your Legacy During the $84 Trillion Wealth Transfer

Over the next two decades, trillions of dollars will move from one generation to the next in the U.S., creating the great wealth transfer. Many families assume that a will or trust is enough, but these documents alone cannot guarantee a secure legacy. Without proactive planning, communication, and financial education, inherited wealth can be lost or mismanaged.

Callout: The real challenge isn’t just taxes or markets — it’s preparing heirs to responsibly manage the wealth they inherit.

The Scope of the Wealth Transfer

By 2045, an estimated $84 trillion will be passed down from older generations, with roughly $72 trillion going directly to heirs. Managing this transfer requires more than legal paperwork — it needs a comprehensive plan that prepares heirs for the responsibilities that come with wealth.

Why Legal Documents Aren’t Enough

Wills and trusts are important, but they don’t cover all aspects of a smooth wealth transfer. Legal documents can become outdated due to life events such as marriage, divorce, or acquiring new assets, making old plans ineffective. Additionally, heirs may inherit money without the experience or knowledge to manage it wisely. Avoiding discussions about finances can create confusion, disagreements, and poor decision-making, leaving the family legacy at risk.

Steps to Build a Strong Legacy

1. Educate and Involve Heirs Early

Families can strengthen their legacy by giving heirs meaningful opportunities to learn while still alive. This can include providing smaller gifts or investments for hands-on experience, involving heirs in family businesses or real estate ventures, and encouraging participation in charitable activities to teach values and strategic thinking.

2. Keep Plans Current and Transparent

Estate plans should be reviewed regularly and updated after significant life changes. Maintaining clear records of assets, accounts, and access instructions is essential. Open communication reduces uncertainty and prevents disputes, ensuring a smooth wealth transfer when the time comes.

3. Discuss Family Values and Goals

Structured family meetings can clarify expectations and responsibilities among heirs. Creating a mission statement or a letter explaining the purpose of the wealth transfer helps heirs understand the family legacy and make decisions aligned with its goals. Transparency and shared understanding foster alignment and unity.

4. Promote Financial Literacy

Preparing heirs to handle wealth responsibly involves teaching them about investments, risk management, budgeting, and decision-making. Encouraging them to participate in philanthropic efforts, review finances, and plan strategically ensures they can maintain and grow the family wealth while preserving family values.

Why Planning Matters

A successful wealth transfer isn’t just about money — it’s about ensuring the next generation carries forward your values and intentions. Families that succeed combine proper estate planning, clear communication, and hands-on education. Simply signing legal documents is not enough; a comprehensive legacy strategy ensures your wealth is preserved for generations.

Callout: Your legacy is more than documents — it’s the knowledge, preparation, and values you pass on.

Take Action to Protect Your Legacy

At Private Tax Solutions, we help families go beyond wills and trusts. Our comprehensive approach combines strategic estate and legacy planning, preparing heirs through education and guidance, and implementing practical wealth management strategies. Schedule a consultation today to develop a plan that safeguards your family’s future and ensures your wealth leaves a meaningful impact.

by Donald Hayden

29 Sep 2025

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Raising children is one of life’s richest experiences. It’s also one of the most expensive. From tuition and summer camps to braces and after-school activities, the costs add up quickly. Yet within those very expenses lies an often-overlooked opportunity: thoughtful tax planning.

by Donald Hayden

29 Sep 2025

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The great wealth transfer is already underway, and real estate is at the center of it. Baby boomers and the silent generation own close to $25 trillion in property, from primary residences to investment rentals and vacation homes. Over the next two decades, much of that will move to the next generation—and with it comes the potential for taxes, legal headaches, and even family rifts.

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