A few well-timed tax moves can help lessen your tax bill and set you up for a smoother filing season and a stronger financial year ahead. Whether you’re reviewing strategies before December 31 or starting the new year by getting organized, thoughtful tax planning can make a meaningful difference.
Below are 15 practical strategies to consider as you wrap up the year or prepare for the months ahead, followed by key tax law changes under the One Big Beautiful Bill Act (OBBBA) that may impact your planning going forward.
#1. Make Last-Minute Charitable Donations
Charitable donations to qualified organizations can reduce your taxes if you itemize. Check your deduction limits and confirm transfer times with your bank or financial institution to make sure donations count before year-end. Remember, new rules take effect in 2026, which could make donations slightly less valuable for high-income taxpayers. Giving before year-end could save you more.
#2. Use Your Annual Gift Tax Exclusion
You can give up to $19,000 per person for 2025 without triggering gift tax. Planning gifts before December 31 can help reduce your taxable estate. A popular strategy: fund 529 College Savings Plan. Contributions grow tax-free, and withdrawals for qualified education expenses aren’t taxed.
#3. Review Your Investment Portfolio
Before year-end, take a careful look at your investments. Strategically selling some winners or harvesting losses can help reduce capital gains taxes and position your portfolio for a stronger start to the new year. Check your 401(k) account too. Adjusting your investment allocations can help ensure your retirement savings stay aligned with your goals.
#4. Use Your $3,000 Capital Loss Offset
If your investment losses exceed your gains for the year, you can use up to $3,000 of those net capital losses to offset ordinary income such as wages, interest, or business income on your federal tax return. This can help reduce your taxable income and lower your overall tax bill.
#5. Maximize Kiddie Tax Rules
As the year comes to a close, check your child’s investment accounts. A child can earn up to $1,350 in dividends or interest and pay tax at their lower rate. Planning gifts or investment income before year-end can help your family take full advantage of this threshold and reduce overall taxes.
#6. Consider Fully Funding Retirement Accounts
Contribute up to the annual limits to retirement accounts. This may lower taxable income and build long-term savings. The maximum pre-tax contribution dollar amount is set by the IRS and adjusted for inflation annually. Review your 2025 and 2026 IRS 401(k) Contribution and Compensation Limits.
#7. Identify Any Potential Household Employees
If you employ household workers, such as caregivers, gardeners, or housekeepers, review whether you are required to withhold and pay payroll or employment taxes. Properly reporting household employees can help you avoid penalties and stay in compliance with federal and state tax rules.
#8. Consider Donating Appreciated Stock Owned One Year or Longer
If you have stock you’ve owned for more than one year, donating it to a qualified charity can be a smart tax move. You may avoid paying capital gains taxes on the appreciation and receive a deduction for the full fair-market value of the stock. This strategy can maximize the impact of your charitable giving while reducing your tax liability.
#9. Review Retirement Accounts for Required Minimum Distributions (RMD).
If you are subject to RMDs from retirement accounts like traditional IRAs or 401(k)s, review your accounts before year-end to ensure distributions are taken on time. Failing to take the required amount can result in penalties and planning ahead can help you manage your taxable income.
Use this calculator to determine your Required Minimum Distribution (RMD).
#10. Use Flexible Spending or HSA Accounts
If you have a health FSA, dependent care FSA, or HSA, review your accounts before year-end to ensure you use the funds on eligible expenses. Unused FSA money may expire at the end of the plan year, so scheduling medical appointments, filling prescriptions, or paying for qualifying dependent care can help you maximize your benefits. Contributions to an HSA, on the other hand, can roll over and grow tax-free, making them a powerful tool for current and future healthcare costs.
#11. Evaluate Retirement Rollovers
Thinking about rolling your retirement plan assets into a Roth IRA? Now is a great time to review your options. While conversions may trigger taxable income, careful year-end planning can help you manage your tax bill now while setting yourself up for future tax-free growth, making your retirement savings work even harder for you.
Watch this webinar: Smart Strategies for Establishing IRAs and Rollovers. In it, you’ll hear directly from John Slavic, CEO and Founder of Slavic401k. With his extensive experience, John will provide practical strategies for approaching IRAs and offer insider knowledge.
#12. Estimate Your Tax Liability and Make Estimated Tax Payments
It’s a good idea to project your tax liability and make any required estimated tax payments. Paying now can help you avoid underpayment penalties and reduce surprises when you file your return next year. This is especially important if you have income that isn’t subject to withholding, such as self-employment income, investment gains, or retirement distributions.
#13. Create a List of Expected 1099s
Take stock of any 1099 forms you expect to receive. These forms report income from sources like:
Retirement accounts, like 401(k) or IRA distributions Interest from bank accounts Dividends from investments Self-employment or freelance work Other miscellaneous income
Tracking these now ensures you don’t miss any income when filing your taxes, which helps prevent mistakes, delays, or IRS notices. Review The 1099-R Explained: A Taxpayer’s Guide.
#14. Review Your W-2 Withholdings
If your income or tax situation changed this year, such as a raise, new job, or major life event, review your W-2 withholdings with your employer before year-end. Adjusting your withholding can help ensure the right amount of tax is taken from your paychecks, reducing the risk of owing too much or getting a smaller refund next year.
View the IRS guidance on reviewing federal withholding and how to check or change it.
#15. Organize Your Tax Records
Start gathering and organizing your tax records before the year ends. Proper documentation is key to claiming all available deductions and credits, which can help maximize your tax savings.
Tip:Always consult a tax professional before taking action. Keeping records organized and understanding the requirements ensures you get the full benefit of your deductions and credits.
Key Tax Law Changes in 2025 (OBBBA)
The One, Big, Beautiful Bill Act was signed into law in summer 2025 and affects a variety of deductions and credits for the 2025 tax year and beyond. Here is an up-to-date look at the provisions most likely to impact your planning.
No tax on tips: Employees and self-employed individuals in qualifying tipped occupations can deduct up to $25,000 of tip income from federal taxable income through 2028. This phases out when your income exceeds $150,000 ($300,000 for married couples). No tax on overtime pay: Through 2028, workers can deduct up to $12,500 ($25,000 for joint returns) for qualified overtime pay. This is also subject to a phaseout above $150,000 ($300,000 for married couples). Child tax credit increases to $2,200 per qualifying child, up from $2,000. Extra deduction for seniors:Taxpayers age 65 or older may claim an additional $6,000 deduction per person in 2025 through 2028, on top of the standard deduction. This deduction phases out between $75,000 and $175,000 for single taxpayers ($150,000 and $250,000 for married couples). State and local tax deduction: The itemized SALT deduction cap increased to $40,000 for 2025, which could benefit homeowners in high-tax states. Electric vehicle tax credit expired on September 30, 2025. A tax credit of up to $7,500 for buying or leasing new vehicles ended. New cryptocurrency reporting: Brokers of digital assets must now report sales and exchanges of digital assets to the IRS starting in 2025. This will be similar to the reporting of traditional security transactions like stocks, bonds, and mutual funds. Higher catch-up contributions for select ages: Under the SECURE 2.0 Act, employees who are ages 60 through 63 can make larger catch‑up contributions to workplace retirement plans in 2025 and beyond.
Finish Strong. Start Smart.
Use this guide as a checklist as you prepare to file your taxes and make adjustments for the months ahead. Whether you’re closing out the year or settling into the new one, tax planning is an opportunity to align your finances with both short- and long-term goals.
By reviewing your accounts, maximizing contributions, and staying informed about 2025 tax law changes, you can reduce taxable income and position yourself for a strong financial start in 2026. As always, consult a qualified tax professional to ensure strategies are tailored to your unique situation.
