Timely Tax Tips: Smart Moves to Make Before Year-End
Year-End Tax Tips: How to Lower Your Bill Before 2025 Ends
The last few months of the year aren’t just for holiday shopping—they’re your final window to make moves that can meaningfully lower your 2025 tax bill. Once January 1 arrives, most opportunities to adjust your taxable income or claim additional deductions vanish. Whether you’re a busy professional, freelancer, or small business owner, these quick, strategic steps can help you finish the year strong and start the next one on solid financial footing.
Boost Retirement Savings Before the Clock Runs Out
One of the simplest and most powerful ways to save on taxes is by maximizing your retirement contributions before December 31.
Here’s what to know:
- 401(k) and 403(b) Plans: You can contribute up to $24,500 for 2025 ($31,000 if you’re age 50 or older). Every dollar you contribute reduces your taxable income.
- IRA Contributions: You have until April 15, 2026 to contribute for the 2025 tax year, but acting before year-end helps lock in savings early. The limit is $7,500 ($8,500 if age 50+).
- Health Savings Accounts (HSAs): If you have a qualifying high-deductible health plan, you can contribute $4,300 (individual) or $8,600 (family) for 2025. These accounts offer a triple tax advantage: contributions are deductible, growth is tax-free, and withdrawals for qualified expenses aren’t taxed.
Tip: Even small end-of-year contributions can help you reach the next contribution tier and reduce taxable income, while building long-term security.
Maximize Charitable Giving Opportunities
Charitable donations can still pack a financial punch, especially when done strategically.
Consider these year-end giving tactics:
- Donor-Advised Funds (DAFs): Contribute to a donor-advised fund before December 31 to receive an immediate deduction this year, while taking your time to distribute funds to charities later.
- Bunching Donations: If your total itemized deductions fall below the standard deduction threshold, consider “bunching” multiple years’ worth of charitable gifts into one tax year. This helps you exceed the threshold and claim a larger deduction.
- Non-Cash Donations: Donating appreciated assets (like stocks) instead of cash lets you avoid capital gains while still deducting the full fair market value.
Tip: Always obtain proper receipts or acknowledgment letters for any charitable donation over $250.
Boost Retirement Savings Before the Clock Runs Out
One of the simplest and most powerful ways to save on taxes is by maximizing your retirement contributions before December 31.
Here’s what to know:
- 401(k) and 403(b) Plans: You can contribute up to $24,500 for 2025 ($31,000 if you’re age 50 or older). Every dollar you contribute reduces your taxable income.
- IRA Contributions: You have until April 15, 2026 to contribute for the 2025 tax year, but acting before year-end helps lock in savings early. The limit is $7,500 ($8,500 if age 50+).
- Health Savings Accounts (HSAs): If you have a qualifying high-deductible health plan, you can contribute $4,300 (individual) or $8,600 (family) for 2025. These accounts offer a triple tax advantage: contributions are deductible, growth is tax-free, and withdrawals for qualified expenses aren’t taxed.
Tip: Even small end-of-year contributions can help you reach the next contribution tier and reduce taxable income, while building long-term security.
Maximize Charitable Giving Opportunities
Charitable donations can still pack a financial punch, especially when done strategically.
Consider these year-end giving tactics:
- Donor-Advised Funds (DAFs): Contribute to a donor-advised fund before December 31 to receive an immediate deduction this year, while taking your time to distribute funds to charities later.
- Bunching Donations: If your total itemized deductions fall below the standard deduction threshold, consider “bunching” multiple years’ worth of charitable gifts into one tax year. This helps you exceed the threshold and claim a larger deduction.
- Non-Cash Donations: Donating appreciated assets (like stocks) instead of cash lets you avoid capital gains while still deducting the full fair market value.
Tip: Always obtain proper receipts or acknowledgment letters for any charitable donation over $250.
Healthcare and FSA Reminders
Your health-related accounts can also impact your tax liability—don’t overlook them as the year wraps up.
- Flexible Spending Accounts (FSAs): These are “use-it-or-lose-it” accounts. Check your employer’s policy as some allow a small carryover (typically up to $640) or a grace period into the next year, but unused funds often expire after December 31.
- Health Savings Accounts (HSAs): As mentioned earlier, HSAs offer a rare triple tax advantage. If you haven’t maxed out contributions, doing so now can reduce taxable income and boost savings for future healthcare costs.
Tip: Use remaining FSA funds for eligible expenses like prescription glasses, dental visits, or health screenings before they expire.
Don’t Wait—Act Before December 31
Tax planning is most effective when done before the calendar turns. By December 31, many of the year’s biggest tax-saving opportunities close for good.
Take action now:
- Review your deductions and credits with a CPA.
- Adjust withholdings or make final estimated payments.
- Confirm charitable contributions, FSA usage, and business purchases before year-end.
Once January hits, most of these levers are locked in until the next tax year. Acting today could save you thousands tomorrow.
Ready to optimize your year-end strategy?
Schedule a consultation with GD Financial Services to review your portfolio, contributions, and deductions before December 20,2025. Our team can help you identify savings opportunities, reduce your tax liability, and start 2026 financially confident.
