11/08/2025
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Year-End Tax Planning Tips: 2025 EDITION
There's still time to act
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Tip Category: Planning
At the end of each year there are a number of things to consider that may have a positive impact on your tax obligation. Here is a list of ideas that may be worth a quick review while there is still time. And especially this year with recent tax law changes.
1. Maximize your retirement savings while reducing your taxable income. There is still time to make contributions to employer retirement plans like a 401(k). Remember each year has a contribution limit and if you don't take advantage of it, it is lost. And with law changes it is important to note:
Special bonus catch up contributions for those age 60 to 63 is $11,250 (up from $7,500) so leverage this rule if it applies to you.
Beginning in 2026 those with incomes above $125,000 can ONLY put catch up contributions in Roth employer retirement accounts. So plan accordingly this year AND next.
2. Leverage the new $40,000 tax limit for itemized deductions. This is up from $10,000. It may impact how you treat itemizing your tax return this year. (see our prior tips on this subject!)
3. Fund your final charitable donations. Remember, your strategy here may change with new law changes, including the ability to deduct more of your taxes this year. Include in this review:
Donating appreciated stock owned one year or longer, either directly to a qualified charity or through a donor advised charitable trust.
If 70 1/2 or older consider making a qualified charitable donation (QCD) from a qualified retirement account. The limit in 2025 is $108,000 ($216,000 for married couples) and can serve as your required minimum distribution as well as being a tax saving tool. But ask for help here, as you need to do this correctly.
4. Review your investment portfolio for capital gain and loss planning. In addition to the ideas already mentioned, remember you can net gains against losses AND you can use up to $3,000 in net capital losses to offset ordinary income.
5. Maximize the kiddie tax threshold and gift rules. $2,700 of unearned income can be taxed at your child’s lower tax rate and you can gift up to $19,000 per tax payer this year.
6. Review medical funding accounts. Remember contributions to an Health Saving Account (HSAs), if you have this plan available to you, effectively saves money on all your qualified medical, dental and vision spending. Plus unused balances carry over from year to year. So maximize the annual contribution while there is still time. While Medical Savings Accounts (MSAs) do not have the same flexibility, it is good to review the rules now and take advantage of any plan available to you to ensure you do not lose this tax-free funding opportunity.
7. Prepare now for tax-free tips and overtime pay. If you have not already done so, review the approved occupations for qualified tips and confirm the amount of this benefit long before you receive documentation from your employer. The same holds true for overtime pay. Employers are not required to issue W-2s or 1099s with this breakout in 2025, so you will need to ensure the reporting you do receive is accurate.
8. Estimate your tax liability and make any final estimated tax payments. Please note the impact of:
Tax-free tips and overtime pay
The new $6,000 senior deduction ($12,000 if you and your spouse qualify)
Your current tax withholdings and make any adjustments
Any other impacts from the new tax laws (like interest paid on new car loans) and how it changes your situation
9. Consider any rollover of tax-deferred retirement accounts into Roth accounts.
10. Get prepared for tax filing. This includes:
Creating a list of expected W-2s and 1099s
Review of your tax withholdings
Issuing any required tax forms (especially if you have household employees)
Organization of your tax records
Should you have any questions on these ideas, ask for help. In many cases, the requirements and documentation needed are important to ensure you receive the full tax savings benefit.
