Year-End Tax Planning Strategies for 2025

Effective tax planning requires year-round attention, but the end of the year presents unique opportunities to reduce your tax liability. Here are key strategies to consider before December 31st.

Maximize Retirement Contributions

Contributing to retirement accounts like 401(k)s and IRAs can reduce your taxable income. For 2025, you can contribute up to $23,000 to a 401(k) (plus $7,500 catch-up if 50+). Traditional IRA contributions are also deductible up to certain income limits.

Harvest Tax Losses

If you have investments that have lost value, consider selling them before year-end to realize capital losses. These losses can offset capital gains and up to $3,000 of ordinary income.

Make Charitable Contributions

Charitable donations made before December 31st are deductible for the current tax year. Consider donating appreciated assets like stocks, which can provide additional tax benefits.

Defer Income

If you're self-employed or have control over when you receive income, consider deferring income to the next year if it will lower your current year's tax bracket.

Review Your Withholding

Check your tax withholding to ensure you're not overpaying or underpaying. Adjustments can be made throughout the year to avoid surprises at tax time.

Our tax planning experts can help you develop a personalized strategy based on your unique financial situation.