5 Year-End Tax Moves To Slash Your 2025 Taxes Fast

The 2025 tax year is quickly coming to an end. Planning ahead now could help lower your tax bill and boost your savings.

Find Out: Here’s How to Avoid a Huge Tax Bill After a Successful Side Gig

Read More: 6 Subtly Genius Moves All Wealthy People Make With Their Money

Chief strategist at JPMorgan Asset Management, David Kelly, told Yahoo Finance that many taxpayers will pay more upfront in 2025 and receive a larger refund in 2026. He estimated the average refund could be $3,743 — a more than 17% increase compared to 2025, or about $557.

But how much you could potentially save also depends on how you prepare. According to Fidelity, here are five tax-saving moves to consider.

Although April 15 is the tax deadline, Dec. 31 is another important date to mark on the calendar. This is the cutoff date for contributions to workplace retirement plans, college savings accounts and more, Fidelity pointed out.

You can contribute up to $23,500 to 401(k) or 403(b) plans for 2025, with an extra $7,500 catch-up if you’re 50 or older. According to Charles Schwab, a $20,000 401(k) contribution could lower your taxable income by the same amount and save you about $4,400 in federal taxes if you’re in the 22% bracket.

The deadline also applies to 529 college savings plans, which may qualify for state tax deductions and allow up to $19,000 per person in annual gifts.

And for those age 73 or older, Dec. 31 is also the last day to take required minimum distributions (RMDs) to avoid penalties.

For You: Can You Write Off Your Home Insurance on Your Taxes?

If you have investments that have lost value this year, you may be able to use those losses to lower your tax bill. Through a strategy known as tax-loss harvesting, investors can sell underperforming assets to offset capital gains from other investments, and even apply up to $3,000 of remaining losses toward ordinary income each year. Any additional losses can be carried forward to future tax years.

It’s also important to follow the wash-sale rule, which prevents you from buying a “substantially identical” investment within 30 days before or after the sale. Currently, this rule doesn’t apply to cryptocurrencies, but that could change, Fidelity noted.

Fewer than 10% of taxpayers itemize, Fidelity pointed out, but it can be worthwhile if your deductions surpass the standard deduction, which is $15,750 for single filers and $31,500 for married couples in 2025. Common itemized deductions include medical expenses, mortgage interest, state and local taxes (SALT) and charitable donations.

Under the One Big Beautiful Bill (OBBB), the SALT deduction cap was temporarily raised to $40,000 through 2029 for eligible filers, before reverting to $10,000. Also, taxpayers age 65 and older can claim an extra $6,000 deduction starting at certain income levels.

Several provisions, including the new senior deduction, no tax on car loan interest, no tax on overtime and no tax on tips, are available to itemizing and non-itemizing taxpayers. For example, certain tipped workers can exclude up to $25,000 of tip income and hourly workers up to $12,500 of overtime pay from taxable income in tax years 2025 through 2028.

A Roth IRA conversion lets you move money from a traditional IRA into a Roth IRA, which allows you to pay taxes now so you can enjoy tax-free withdrawals later. This can make sense if you expect your income or tax rate to rise in the future, or if you want to reduce RMDs later in retirement.

With a Roth conversion, the amount you transfer is taxed as ordinary income for that year. Once converted, future qualified withdrawals, including earnings, are tax-free as long as you meet the five-year rule and are at least 59½ years old.

For higher earners who can’t contribute directly to a Roth, the backdoor Roth IRA and mega backdoor Roth options allow nondeductible contributions to be moved into a Roth account.

During the second quarter of 2024, Roth conversions rose 46% from the year before, according to Fidelity data cited by CNBC. According to the publication, many advisors choose year-end Roth conversions because it’s easier to project the tax consequences.

In 2025, you can give up to $19,000 per person without triggering gift taxes, or $38,000 if you’re married and split gifts. Annual gifting can also help lower your taxable estate over time.

If you itemize, donating to a qualified charity or donor-advised fund (DAF) can provide an immediate deduction and potential capital gains savings if you donate appreciated assets like stocks.

The OBBB also made some changes to charitable giving. Starting in 2026, a new deduction will allow non-itemizers to write off up to $1,000 in cash donations, or $2,000 for joint filers. However, the top charitable deduction rate will drop from 37% to 35%, so high-income donors may want to make large contributions before the change takes effect.