Year-End Tax Planning: What Charlotte Investors Should Do

Most people start thinking about taxes in December. The proactive ones start in July.
That five-month difference between acting in summer and scrambling in winter is often the difference between paying what you owe and paying significantly more than you have to.
Several of the most powerful tax strategies available to investors, retirees, and business owners in Charlotte have windows that close before December. Waiting too long means the opportunity is gone for another year.
Here’s a practical guide to the tax planning moves worth making right now and why timing matters for each one.

1. Review Your Estimated 2025 Tax Position

Before you make any tax moves, you need a clear picture of where you stand. At the midpoint of the year, most people have enough data to make a reliable estimate of their 2025 taxable income.
Work with your CFP® or CPA to project:

• Your estimated 2025 W-2 or self-employment income
• Expected capital gains distributions from mutual funds or ETFs (usually announced in October/November forecast now)
• Any planned Roth conversions, account liquidations, or major asset sales
• Business income for the year if you’re self-employed or a business owner

This projection is the foundation. Every other tax strategy you implement should be calibrated against this number.
Talk to a Charlotte tax strategist at Totem Wealth Management

2. Identify Tax-Loss Harvesting Opportunities Now

Tax-loss harvesting selling investments that are currently underwater to realise a loss, which offsets gains elsewhere in your portfolio is time-sensitive.
The best harvesting opportunities exist when markets have been volatile or when individual positions have declined. Waiting until December means competing with millions of other investors doing the same thing and potentially getting worse execution prices.
Rules to know:

• The wash-sale rule: You cannot repurchase the same or substantially identical security within 30 days before or after the sale. Plan replacements in advance.
• Capital loss netting: Short-term losses offset short-term gains first; long-term losses offset long-term gains. Excess losses offset ordinary income up to $3,000/year, with any remainder carried forward.
• Taxable accounts only: Tax-loss harvesting only applies to taxable brokerage accounts not 401(k)s, IRAs, or other tax-advantaged accounts.

IRS — Topic No. 409: Capital Gains and Losses — cite as the authority source for wash-sale rules and capital loss treatment. IRS.gov = maximum authority.
Read our guide: What are long-term tax strategies?

3. Evaluate Your Roth Conversion Window

If you’re between major income years perhaps in early retirement before RMDs and Social Security begin, or experiencing a temporary income dip a Roth conversion may be worth serious consideration.
A Roth conversion moves money from a Traditional IRA or 401(k) into a Roth IRA. You pay income tax on the converted amount in the current year, but all future growth and qualified withdrawals are tax-free forever.
Why July matters: Roth conversions completed by December 31 take effect in the current tax year. The conversion amount adds to your taxable income so the goal is to fill up your current bracket without crossing into the next one.
To get this right, you need your projected 2025 income before you can determine how much to convert. Mid-year is the ideal time to model this.
Explore tax-deferred investment strategies on the Totem blog

4. Maximise Retirement Account Contributions Before Year-End

The 2025 contribution limits are: $23,500 for 401(k)s ($31,000 if you’re 50+) and $7,000 for IRAs ($8,000 if you’re 50+).
If you’re not on track to hit these limits, adjust your payroll contribution percentage now — before Q4. Many HR systems require 30–60 days to process changes, and contributions must be payroll-deducted before December 31.
Business owners have additional options:

• SEP-IRA: Contribution deadline is your tax filing deadline (including extensions). But investment decisions made earlier benefit from more months of growth.
• Defined Benefit Plan: Must be established before December 31 of the contribution year. This is one reason July discussions matter an October decision may be too late.
• Solo 401(k): Must be established by December 31 for the current tax year. The employee contribution is due December 31; employer contribution can be made up to the filing deadline.

Explore 401(k) plan creation and business planning in Charlotte

5. Review Your Asset Location Strategy

Asset location refers to which investments you hold in which types of accounts and it’s one of the most overlooked sources of tax efficiency for investors with both taxable and tax-advantaged accounts.
The general principle:

• Tax-inefficient assets (bonds, REITs, actively managed funds with high turnover) → hold inside tax-advantaged accounts (401k, IRA)
• Tax-efficient assets (index funds, ETFs, stocks held for long-term gains) → hold in taxable brokerage accounts

Mid-year is a good time to review whether your current allocation matches this structure especially if you’ve made significant contributions, received new funds, or if market movements have shifted your allocations.
 NAPFA — National Association of Personal Financial Advisors — cite when mentioning fee-only fiduciary advisors. Strong DA, independent credibility signal.

Making It Happen in Charlotte

The strategies above tax-loss harvesting, Roth conversions, retirement account maximisation, asset location each require coordination between your investment portfolio, your tax situation, and your broader financial plan. Done in silos, they can conflict. Done together, they compound.
This is exactly what a fee-only, fiduciary wealth manager in Charlotte does. We work throughout the year not just at tax time to ensure these opportunities are identified and captured.
If you’d like a mid-year tax strategy review before the Q4 window closes, we’re currently scheduling consultations for July and August.
Book a mid-year tax strategy consultation with Totem Wealth Management
Related reading: Roth IRA vs. Traditional IRA in 2025  |  What is investment diversification?  |  Tax-deferred investments guide

FAQs

 Ideally, year-end tax planning should begin in the summer July or August. Several key strategies, including Roth conversions, tax-loss harvesting windows, and retirement plan establishment deadlines, require action well before December 31. Planning in Q3 gives you maximum flexibility to optimise before the year-end window closes.

Tax-loss harvesting involves selling investments at a loss to offset capital gains in your portfolio, reducing your tax liability for the year. It is most valuable for investors with significant capital gains in taxable accounts. It requires careful attention to the wash-sale rule (you cannot repurchase the same security within 30 days) and should be coordinated with your overall investment strategy.

A Roth conversion can be valuable for North Carolina residents, but the analysis must include both federal and state taxes (NC taxes conversion income at 4.5% in 2025). The strategy is most compelling during years of temporarily lower income such as early retirement, career transitions, or years before Social Security and RMDs begin. A personalised projection with a Charlotte CFP® advisor is the clearest way to evaluate whether a conversion makes sense for your specific situation.

Business owners have access to powerful tax minimisation strategies including: SEP-IRA and Solo 401(k) contributions, Defined Benefit Plan establishment (for significant deductions), Section 199A qualified business income deduction, strategic timing of income and expenses, and health insurance deductions. Many of these require planning and action before December 31, making mid-year review essential.