Tax Season Tips

Your Year-End Tax Checklist: Smart Moves to Make Before December 31

The end of the year isn’t just about holiday planning.

It’s also your last chance to make financial moves that could reduce your tax bill and set you up for a stronger 2026.

Here are the most important actions to take before the December 31 deadline.

Max Out Your Retirement Contributions

Traditional and Roth IRAs

You have until December 31 to maximize contributions that count for 2025.

• Contribution limit: $7,000

• Catch-up (age 50+): Additional $1,000

• Total if 50+: $8,000

If you’re still deciding between Traditional and Roth, consider your current tax bracket. Traditional IRA contributions may be deductible if you meet income requirements, while Roth contributions are made with after-tax dollars but grow tax-free.

If you’re self-employed, you may want to consider a SEP IRA, which allows contributions up to $70,000 based on profits for the year. Your tax professional can help determine if this is an option for you.

401(k), 403(b), and 457 Plans

These have much higher contribution limits and bigger tax-saving potential.

• Standard contribution limit: $23,500

• Catch-up (age 50+): Additional $7,500

• Special catch-up (ages 60-63): Additional $11,250

If you’re self-employed, you may still have time to establish an Individual 401(k) before year-end. This gives you access to both employee and employer contribution limits for significantly higher tax-deferred savings.

Consider Tax-Loss Harvesting

Market volatility creates opportunities.

Tax-loss harvesting means selling investments that have lost value to offset capital gains you’ve realized during the year. You can use up to $3,000 of this year’s losses in excess of gains to offset ordinary income, and any additional excess carries forward to future years.

Important: Be aware of the wash-sale rule. You can’t repurchase the same or any substantially identical security within 30 days before or after the sale, or the loss will be disallowed.

Make Strategic Charitable Contributions

Donor-Advised Funds

A donor-advised fund lets you make a charitable contribution now, get the tax deduction for 2025, and decide later which charities receive the funds.

This strategy is particularly powerful if you’re planning to make charitable gifts over several years. You can “bunch” multiple years of giving into 2025, claim a larger deduction now (especially valuable if you’re in a high tax bracket this year), and distribute the funds to charities over time. Establishing a donor-advised fund requires opening an account with a 501c3 qualified custodian and operating under their granting rules. These custodians have year-end deadlines that apply.

Direct Contributions

Standard charitable contributions must be made by December 31 to count for 2025. Keep detailed records and receipts for all donations.

If you’re 70½ or older, consider making a Qualified Charitable Distribution (QCD) directly from your IRA to charity. This can satisfy your required minimum distribution while excluding the amount from your taxable income.

Review Your Withholding and Estimated Taxes

The fourth quarter estimated tax payment is due January 15, 2026, but reviewing your situation now prevents surprises.

If you’ve had a major life change (new job, freelance income, investment gains, or significant losses), your withholding might be off. Adjusting now can help you avoid underpayment penalties.

Check Your Required Minimum Distributions

If you’re 73 or older, you must take your RMD by December 31 (except for your first RMD, which can be delayed until April 1 of the following year).

Missing an RMD comes with a steep penalty: 25% of the amount you should have withdrawn. This is one deadline you don’t want to miss.

Health Savings Account Contributions

HSAs offer a rare triple tax advantage: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.

2025 contribution limits:

• Individual coverage: $4,300

• Family coverage: $8,550

• Age 55+ catch-up: Additional $1,000

You actually have until the tax filing deadline (typically April 15, 2026) to make HSA contributions for 2025, but reviewing your contribution room now helps with planning.

The Bottom Line

These strategies aren’t one-size-fits-all.

Your best moves depend on your income, tax bracket, investment portfolio, and financial goals. What works for someone in the 12% bracket looks different from strategies for someone in the 35% bracket.

That’s where personalized guidance makes the difference.

If you’re not sure which moves make sense for your situation, let’s talk before the deadline passes. Schedule a consultation to discuss your year-end tax strategy.