Managing high-net-worth taxes requires far more than checking the right boxes before the year ends.
As markets shift, tax laws evolve, and income events stack up, the decisions you make in the closing months of the year can meaningfully shape your long-term wealth strategy.
For high earners — especially those in Arizona — the landscape is favorable but nuanced.
With a flat 2.5% state income tax and flexible state-level deductions, the right year-end moves can offer clarity, confidence, and peace of mind heading into 2026.
As we move into 2026, strategic tax planning helps ensure your financial life supports the purpose, lifestyle, and legacy you’ve worked hard to build.
Optimize Capital Gains in Arizona Before Year-End
Capital gains planning is never just about reducing taxes; it’s about creating flexibility and protecting future returns. The proper steps now can safeguard momentum as you move into a new year.
Evaluate Gains, Losses, and Long-Term Positions
Take time to review the complete picture of your investment activity. Key areas to evaluate include:
- Realized gains to date
- Appreciated legacy assets
- Concentrated equity positions
- Existing capital loss carryforwards
This review is also a good time to revisit behaviors that often lead to unnecessary exposure and to common capital gains mistakes.
Consider Arizona’s Flat 2.5% Income Tax
Arizona’s predictable 2.5% flat income tax can be an advantage for high-net-worth individuals who regularly realize investment income.
While federal rates drive most capital gains decisions, knowing your state exposure is fixed allows for clearer multi-year modeling and more strategic timing.
This flat structure also provides unique opportunities for individuals with fluctuating annual income, such as business owners or investors realizing gains from liquidity events.
It simplifies the decision-making process and helps ensure year-end planning aligns seamlessly with long-term financial goals.
Plan Asset Sales Thoughtfully
Significant sales benefit from intentional coordination. Consider strategies such as:
- Spreading gains across multiple tax years
- Reviewing eligibility for QSBS benefits
- Realizing gains ahead of potential federal rate changes
For retirees or those approaching retirement, thoughtful timing can support more efficient capital gains tax planning— especially when paired with broader income and withdrawal strategies.
Leverage Advanced Charitable Giving Strategies
Thoughtful philanthropy blends generosity with smart tax planning. For many high-net-worth individuals in Phoenix, structured giving also supports their long-term desire to create impact and connection.
Donor-Advised Funds and Appreciated Assets
Donor-advised funds (DAFs) remain one of the most effective vehicles for year-end planning. Opportunities include:
- Donating appreciated securities to avoid capital gains
- Bunching multiple years of giving
- Creating a flexible, long-term charitable plan
Charitable Remainder Trusts & Philanthropic Legacy
For families with meaningful giving goals, charitable remainder trusts (CRTs) can support both income needs and multigenerational values.
These trusts offer a structured way to balance charitable intentions with financial security, providing tax advantages while preserving long-term giving capacity.
CRTs also reinforce a legacy-driven approach to wealth, enabling individuals and families to align their financial strategies with their personal values. This combination strengthens the connection between wealth and purpose, advancing a long-term philosophy of impact.
Review Equity Compensation Events Before Year-End
For many high-net-worth individuals, equity compensation is central to long-term wealth creation. Year-end is a pivotal time to assess upcoming vesting, liquidity events, and potential tax exposures.
Stock Options, RSUs, and Equity Liquidity Events
Review the timing of:
- Option exercises and vesting schedules
- AMT exposure for incentive stock options
- 83(b) election opportunities
If you’ve recently sold or plan to sell business equity, model scenarios carefully.
Many people benefit from proactive tax optimization after selling company equity to prevent unnecessary surprises.
Coordinate With Long-Term Wealth Strategies
Equity events should align with your lifestyle needs, family goals, and overall asset allocation — not just the tax calendar.
As these events often represent substantial wealth increases, coordinating them with broader objectives ensures long-term stability and avoids unnecessary exposure.
Thoughtful alignment also supports a more consistent wealth trajectory over time. By addressing potential tax implications early, you can preserve flexibility and strengthen the foundation of your long-term financial plan.
Maximize Tax-Efficient Investing Opportunities
Markets rarely move in a straight line. Thoughtful positioning in Q4 helps you avoid avoidable tax drag while protecting performance.
Rebalance Portfolios With Purpose
Rebalancing is an opportunity to realign risk exposure, revisit allocation targets, and ensure your portfolio continues to reflect your goals. Small shifts can have meaningful long-term effects when executed before year-end.
In periods of market volatility, rebalancing also helps maintain a disciplined investment approach. This strategy can reduce emotional decision-making and keep your strategy aligned with long-term objectives.
Tax-Loss Harvesting Done Thoughtfully
Tax-loss harvesting can enhance after-tax performance when executed with care. Focus on:
- Identifying positions with unrealized losses
- Avoiding wash-sale conflicts
- Maintaining appropriate market exposure
Strengthen Your Retirement & Legacy Framework
Retirement and legacy planning are deeply personal. Reviewing your framework before year-end ensures it continues to reflect your goals and family priorities.
Review Withdrawal Strategies and RMDs (Required Minimum Distributions)
Ensure RMDs are correctly calculated, and consider whether additional distributions or Roth conversions could improve future tax efficiency. These strategies can help manage long-term tax exposure while providing greater control over retirement income.
It’s also important to consider how withdrawal decisions fit into your broader wealth picture.
Coordinating distributions with investment performance, charitable giving, and long-term planning goals helps maintain clarity and reduces unnecessary complexity.
Evaluate Trusts and Gifting for 2025
Key strategies for keeping your trust tax-efficient and thoughtful philanthropy include:
- Annual exclusion gifting
- Leveraging lifetime exemptions
- Funding 529 plans for education goals
Arizona-Specific Planning Opportunities
Arizona’s low flat tax offers retirees with investment income predictability. The state also allows itemized deductions independent of federal elections, which can create unexpected planning advantages for some households.
Additionally, Arizona’s tax environment can be particularly attractive for individuals who have relocated from higher-tax states.
This statewide tax climate allows you to reassess wealth strategies and explore new avenues for efficiency.
Don’t Overlook Cash Flow, Liquidity, and Withholding
Even the most sophisticated plans rely on strong fundamentals. Year-end is the ideal moment to strengthen your foundation for the year ahead.
Review Withholding and Safe-Harbor Requirements
Make sure estimated payments and withholding align with your income level. High-net-worth individuals with investment or equity income should check safe-harbor thresholds to avoid penalties.
Proper withholding also supports a more streamlined tax filing experience. Ensuring accuracy helps minimize surprises and keep your strategy running smoothly.
Plan for Q4 Liquidity Needs
Year-end expenses, charitable commitments, and investment opportunities often converge. Maintaining liquidity ensures you can act confidently and without unnecessary stress.
Proper year-end planning can also help you take advantage of unexpected opportunities. With a clear understanding of your cash flow needs, you can remain flexible and responsive to market changes.
Preserve Your Wealth With Tax Strategies at Bradley Wealth
When approached intentionally, year-end planning becomes an opportunity to strengthen your financial life — not merely navigate tax rules.
As 2025 draws to a close, now is the time to create alignment between your goals, your resources, and the life you want to experience in the years ahead.
Schedule a Private Consultation and let’s build a strategy that supports your true wealth.
