Tax planning is most effective when it happens before the year ends — not after. Once December 31 passes, most strategies close permanently for that tax year. These ten moves apply to a wide range of taxpayers and are worth reviewing every fall.
1. Max out retirement contributions
401(k) employee deferrals must be made through payroll before year-end. For 2025, the limit is $23,500 ($31,000 if you're 50 or older). SEP-IRA contributions can be made until your tax filing deadline (including extensions), but 401(k) deferrals cannot be retroactive.
2. Harvest tax losses
If you hold investments at a loss, selling them before year-end generates capital losses that offset capital gains dollar-for-dollar. Net losses beyond gains can offset up to $3,000 of ordinary income annually, with excess carried forward to future years. Watch the 30-day wash sale rule — repurchasing substantially identical securities within 30 days before or after the sale disallows the loss.
3. Accelerate or defer income
If you expect to be in a lower tax bracket next year, defer income — hold off billing for December services until January. If you expect a higher bracket next year, accelerate — bill and collect in December. Self-employed individuals and business owners have the most flexibility here.
4. Accelerate deductions
Prepay deductible expenses before year-end: state and local taxes (subject to the $10,000 SALT cap), January mortgage payment (to pick up an extra month of interest), medical expenses if you're near the 7.5% AGI threshold, and business expenses you planned for Q1.
5. Make charitable contributions strategically
Cash donations to qualified charities are deductible up to 60% of AGI. Donating appreciated securities directly to a charity avoids capital gains tax entirely while generating a deduction for the full fair market value. A donor-advised fund allows you to make a large contribution in a high-income year, take the deduction immediately, and distribute grants to charities over multiple years.
6. Check your estimated tax payments
Review whether your estimated payments will cover at least 90% of your 2025 tax or 100% of your 2024 tax (110% if your 2024 AGI exceeded $150,000). If you're short, the January 15 Q4 payment is a lever you still control.
7. Review business asset purchases
Under Section 179 and bonus depreciation rules, businesses can deduct the full cost of qualifying property in the year it's placed in service. If you plan to purchase equipment early next year, buying and deploying it before December 31 pulls the deduction into the current year.
8. Review Roth conversion opportunities
If your 2025 income is lower than usual — or if you're in a low bracket year before required minimum distributions begin — converting traditional IRA funds to a Roth creates a taxable event now but generates tax-free growth and withdrawals permanently.
9. Take required minimum distributions
If you're 73 or older and have traditional IRAs or 401(k)s, failing to take your RMD by December 31 triggers a 25% excise tax on the undistributed amount. This is a compliance item, not a strategy — just confirm you've done it.
10. Call your CPA
The most valuable year-end move is the one that costs you nothing: a 30-minute conversation with your accountant. We know your situation, see the full picture, and can tell you which of these strategies actually applies to you — and what the numbers look like.
