Smart End-of-Year Tax Moves to Make Before December 31

As the year comes to a close, now is the perfect time to take proactive steps that can lower your tax bill, strengthen your financial position, and set you up for a smoother tax season. Whether you’re a business owner, self-employed, or an employee planning ahead, these smart end-of-year tax strategies can help you finish strong.

1. Review Your Income & Expenses

Before the year officially ends, take time to review your income and deductible expenses.Ask yourself:

• Do I expect higher or lower income next year?

• Should I accelerate or delay income or expenses?

  
  

Example: If you anticipate a lower tax bracket next year, delaying a bonus or pushing income into January may reduce your taxes. Conversely, accelerating deductible expenses into December could help lower your taxable income for this year.

2. Max Out Retirement Contributions

Contributing to retirement accounts before year-end can significantly reduce your tax liability.

Contribution limits for 2025:

• 401(k), 403(b), 457 plans: Up to $23,000 (plus $7,500 catch-up if 50+)

• Traditional & Roth IRAs: Up to $7,000 (plus $1,000 catch-up if 50+)

  
  

If you haven’t maxed out your contributions yet, consider making an extra deposit.

3. Use Your FSA Dollars

Flexible Spending Accounts typically follow a “use it or lose it” rule. Check your balance and schedule appointments, buy prescriptions, or stock up on approved medical essentials before December 31 to avoid losing unused money.

4. Check Eligibility for Tax Credits

Don’t leave money on the table. Review credits such as:

• Child Tax Credit

• Earned Income Tax Credit (EITC)

• Clean Vehicle Credit

• Energy Efficient Home Improvement Credit

• Saver’s Credit

• Education Credits (AOTC, Lifetime Learning)

  
  

A quick review now ensures you're prepared to claim what you qualify for.

5. Make Last-Minute Charitable Contributions

Give back while also lowering your tax liability.Cash, goods, or vehicle donations made by December 31 may be deductible if you itemize.

Pro tip: Get a receipt for all charitable contributions—no matter the amount.

6. Consider Tax-Loss Harvesting

If you have investments that have declined in value, you may be able to sell them to offset gains and potentially reduce taxable income.Work with a financial advisor to ensure this strategy aligns with your long-term goals.

7. Organize Your Records Now (Not in April!)

Save yourself stress later by gathering:

• Income forms (W-2, 1099s, K-1s)

• Business receipts

• Charitable receipts

• Medical bills

• Expense logs

• Bank & brokerage statements

  
  

Good organization means fewer delays, fewer mistakes, and a smoother tax filing experience.

8. Evaluate Your Withholding & Estimated Taxes

If you received a large tax bill or refund last year, now is the time to adjust.Make sure your W-4 or quarterly estimated tax payments align with your income to avoid penalties or surprises come tax season.

9. Make Energy-Efficient Home Improvements

If you installed upgrades like:

• Windows, doors, insulation

• Heat pumps

• Solar panels

• Home energy audits

—you may qualify for valuable federal credits. Gathering receipts and certifications now ensures you don’t forget them later.

10. Schedule a Year-End Tax Strategy Session

A professional can help you:

• Identify deductions you may have missed

• Strategize your business write-offs

• Plan for next year’s tax changes

• Optimize your financial decisions before it’s too late

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A simple consultation could save you hundreds—or even thousands.

The best time to prepare for tax season is before the year ends. By taking action now, you can reduce your tax bill, boost your savings, and kick off the new year feeling confident and financially organized.