What financial, business, or life priorities do you need to address this year? Now is an excellent time to think about the investing, saving, or budgeting methods you could apply toward specific objectives, from building your retirement fund to managing your taxes.
The wealth management team at Harbor Hills offers more than planning. They offer a steady place that helps you make thoughtful decisions—quietly, and with intention. Harbor Hills utilizes AI-based tools in several ways to enhance operations, client service, and decision-making.
Here are some financial health ideas to consider, and the team at Harbor Hills can help you get started:
Can you contribute more to your retirement plans this year?
The amount individuals can contribute to their 401(k) plans in 2025 increased to $23,500, up from $23,000 for 2024. Come January, check to see if amounts have changed for the new year.
The IRA contribution limit for both Roth and traditional accounts for 2026 is $7,500, with a catch-up contribution of $1,100, for a total of $8,600 for those 50 and older Your modified adjusted gross income (MAGI) may affect how much you can put into a Roth IRA. With a traditional IRA, you can contribute if you (or your spouse if filing jointly) have taxable compensation, but income limits are one factor in determining whether the contribution is tax-deductible.
Remember, withdrawals from traditional IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. Roth IRA distributions must meet a five-year holding requirement and occur after age 59½ to qualify for tax-exempt and penalty-free withdrawal.
Make a charitable gift.
You can claim the deduction on your tax return, provided you follow the IRS guidelines and itemize your deductions with Schedule A. The paper trail is important here.
If you give cash, you should consider documenting it. Some contributions can be demonstrated by a bank record, payroll deduction record, credit card statement, or written communication from the charity with the date and amount.
Incidentally, the IRS does not equate a pledge with a donation. If you pledge $2,000 to a charity this year but only end up gifting $500, you can only deduct $500. You must write the check or make the gift using a credit card by the end of December.
See if you can take a home office deduction for your small business.
If you are a small-business owner, you may want to investigate this. You may be able to write off expenses linked to the portion of your home used to conduct your business. Before moving forward, consider working with a professional who is familiar with home-based businesses.
Review your withholding status.
Should it be adjusted due to any of the following factors?
- You tend to pay the federal or state government at the end of each year.
- You tend to get a federal tax refund each year.
- You recently married or divorced.
- You have a new job, and your earnings have been adjusted.
Consider the tax impact of any upcoming transactions.
Are you planning to sell any real estate this year? Are you starting a business? Might any commissions or bonuses come your way in 2026? Do you anticipate selling an investment that is held outside of a tax-deferred account?
Keep in mind, this article is for informational purposes only, and not a replacement for real-life advice. Also, tax rules are constantly changing, and there is no guarantee that the tax landscape will remain the same in the years ahead.
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Harbor Hills utilizes AI-based tools in several ways to enhance operations, client service, and decision-making.