"John has been asking Katy's friends tons of questions, like what kind of engagement ring she would want and what the best way to propose would be," a source says. "They've been so serious about each other ever since they got back together [in June]."

John hasn't decided on all the details just yet, but according to the source, he will by the end of the year. "John wants to do something special, probably around the holidays," says the source. "There are a lot of options on the table. Nothing is ruled out. It could happen on a romantic getaway or during a family dinner."