If you had earned income in 2024, you can make contributions to your individual retirement accounts (IRAs) for the 2024 tax year up until the deadline for filing your return (usually April 15), not including extensions.

Traditional IRA: You can contribute up to $7,000 (or up to $8,000 if you were 50 years or older in 2024). Moreover, those contributions are potentially deductible. Even if they are not, they may be used for conversions to Roth IRAs and possibly doubled, even for non-working spouses.

Roth IRA: You may be able to make non-deductible contributions up to these same limits. This benefits you because all growth, and future distributions, will generally be tax-free.¹

SEP or SIMPLE IRA: If you own a business that offers a Simplified Employee Pension (SEP) plan or a Savings Incentive Match Plan for Employees (commonly known as a SIMPLE IRA), you have a grace period for making contributions to those accounts based on the due date of the business’s or employer’s tax return, including extensions.

Generally, trustees and executors have until March 6, 2025 to distribute income to beneficiaries if they wish to have those distributions treated for tax purposes as if they were made in 2024.

If a trustee has discretion over whether or not to make a distribution, their decision must be informed, always, by the terms of the trust, the trust’s income and transfer tax characteristics, and the beneficiary’s best interests. 

Only after weighing these factors should a trustee decide whether a distribution makes economic sense – as it often does. The marginal U.S. income tax rate for many trust beneficiaries, even for some whose income exceeds $500,000, is often well below the top tax rate of 37% (that’s generally the rate the trust would pay, as the top tax rate on trust income – also 37% – applies to income over around $15,000).²

Several years ago, the Internal Revenue Service issued a notice that it intends to issue regulations exempting pass-through entities (e.g., partnerships and S corporations) from the $10,000 deductibility cap on state and local taxes (SALT) at the entity level.³

Check your state’s laws or speak with your tax professional if you have a pass-through entity to determine whether or not you can and should elect to use this deduction. (Not all entities can or would want to make this election.) Many states require these generally annual elections to be made by March 15 for calendar-year partnerships, and these elections are ordinarily only applicable for the tax year when the election is made.

Keep in mind that potential changes in law could impact whether, and to what extent, these elections will be available in future years. The $10,000 SALT deduction cap is one of many provisions of the 2017 Tax Cuts and Job Act that is scheduled to expire at the end of 2025. We expect this to be an area of focus.

A Qualified Opportunity Zone Fund (QOF) has special rules regarding short- or long-term capital gains that may be helpful to understand. Under these rules, you may have 180 days from the date of realization to invest the gains in a QOF and defer (until the end of 2026) payment of taxes that would otherwise be due. These rules apply to gains realized either directly or indirectly (e.g., through a pass-through entity, such as a partnership).

If you own an interest or shares in a pass-through entity that realized gains early in 2024, the date of realization for that sale may have been December 31, 2024, or it could be March 15, 2025.⁴ Speak with your tax advisors to determine the relevant date of realization, and how to measure the 180-day period in your circumstances.

As a general rule, to avoid penalties, private non-operating foundations must distribute at least 5% of their assets annually to public charities. However, if needed, you may be able to use a 12-month grace period to make distributions.

Thus, a private foundation with a December 31 fiscal year that is determined to have $1 million of assets – and therefore a minimum distribution requirement of $50,000 as of December 31, 2024 – would have until December 31, 2025, to distribute that $50,000. A donor-advised fund (DAF) can be the recipient of the required distribution amount.

Check with your tax advisors to see what your private foundation’s final deadline for these distributions may be if the foundation requires more time. 

Following the equity market rally in 2024, you likely hold some assets at a gain. As noted, it is extremely tax-wise to donate public equities, in kind, to a public charity – or to a DAF, private operating foundation or private non-operating foundation. Here’s why: In addition to receiving a deduction based on the fair market value of the donated stock, you also avoid tax on the equities’ unrealized gains.

But beware: Make sure you’ve held the donated stock, unhedged, for more than one year. The holding period may be longer if the securities were received in connection with services performed as a partner for certain profits interests (e.g., at a hedge fund, venture capital or private equity fund). 

Also be sure the financial firm holding your shares donates the correct lot, and if that lot has ever been transferred from another firm, that the basis and holding period information is replicated correctly by the new firm.

Review both your actual 2024 and anticipated 2025 tax bills to determine your minimum necessary quarterly estimated payments for this year.

If you expect substantially greater income in 2025 than 2024, you may want to rely on the actual payments you made in 2024 to determine the estimated payments you make this year. This is because the law allows taxpayers to make estimated payments during the course of the year, interest- and penalty-free, up to whichever is less: 110% of the prior year’s taxes, or 90% of the current year’s taxes.

Thanks to this rule, you can keep more of your pre-tax income until the tax filing deadline in April 2026 and invest that income safely – such as in U.S. Treasuries maturing by next April.

Many taxpayers have relocated in recent years, and taxes have been a consideration in some of those moves. It requires a great deal of planning (and sometimes triggers headaches!) to establish domicile in the state where you have moved. Ask your J.P. Morgan team for a copy of our Changing Domicile Checklist.

Also: It may be easier to switch the situs of a trust you’ve created, so review those as well. A trust governed by one state’s laws for administrative purposes may be subject to tax by a different state based on a number of factors, including the residence of the grantor and/or current trustees.

Consider making annual exclusion gifts (up to $19,000 per donor, per recipient) early in the year so that any growth on these assets over the course of the year occurs off your balance sheet.

Consider implementing a systematic program for harvesting capital losses for your securities portfolios. Doing so might help you take advantage of any market downturns while avoiding the wash sale rules so adverse to taxpayers – and to bank those losses to offset capital gains – those already realized, or those you expect in the future.⁷

While you’re reviewing your portfolio with an eye to harvesting losses, be sure to evaluate the tax efficiency of your holdings across all of your family’s accounts, including IRAs and trusts. Asset location can be as important as asset allocation to wealth growth and preservation. A key contributor to growing family wealth over time is making sure the proper assets are placed in the proper accounts: where possible, we recommend having tax-deferred accounts hold tax-inefficient assets, and taxable accounts hold tax-efficient assets.