Tax Day may still be months away, but there are plenty of tax-planning strategies to consider before your filing deadline. In fact, certain tasks should not—and in some cases cannot—wait until next year, lest you miss out on potentially important tax-saving opportunities and last-minute tax strategies. Here are the top strategies to consider before December 31—and those you can ponder until Tax Day.
1. Be sure to take all your required minimum distributions (RMDs)
Generally, taxpayers age 73 or older must take minimum distributions from their tax-deferred retirement accounts by the end of the year. If you miss the deadline, you could be subject to a 25% penalty on the portion of your RMD you failed to withdraw.
2. Maximize contributions to your workplace retirement plan
First and foremost, if your employer matches contributions, be sure to contribute enough to your tax-deferred workplace retirement plan to get the full amount. That said, consider contributing the maximum allowed—$23,500 ($31,000 if age 50 or older) in 2025 for employer retirement plans. Not only can this help reduce your taxable income for the current year and boost your overall savings, but doing so can also be a great tax-planning strategy if you think your tax rate will be lower in retirement than it is today. (NOTE: Starting in 2026, catch-up contributions for highly compensated employees (earnings above $145k) will mandatorily be classified as ROTH contributions.)
3. Optimize your charitable contributions
If charitable giving is part of your financial plan and you itemize your deductions, act by year’s end to ensure your donations are as tax-efficient as possible:
- Charitable donations: In general, you can deduct cash donations to qualified charities worth up to 60% of your adjusted gross income (AGI). Donating appreciated long-term investments can be especially tax-efficient because you don’t have to recognize the capital gains, and you can receive a tax deduction for the full fair-market value of the donation (up to 30% of your AGI).
- Qualified charitable distribution (QCD): If you’re 70½ or older, you can donate up to $108,000 to a charity directly from your IRA using a QCD for tax year 2025. You won’t be taxed on the distribution or receive a tax deduction for the donation, but you can use your gift to satisfy all or part of your RMD without adding to your taxable income.
4. Help out your loved ones with tax-free gifts
You can give away up to $19,000 ($38,000 if married) per person to an unlimited number of people without eating into your lifetime estate and gift tax exemption. This won’t reduce your taxable income for the year, but it will allow you to strategically transfer wealth to your heirs tax-free.
5. Reduce or eliminate capital gains with tax-loss harvesting
The end of the year is a great time to make sure your portfolio is still aligned with your goals. When rebalancing, you may be able to reduce your tax liability by offsetting any realized capital gains with your losses. One way to employ this tax-saving strategy is to tally up your capital gains for the year, then cash out capital losses of equal value. If you have more capital losses than gains, not only can you potentially offset up to $3,000 of ordinary income on your 2025 tax return, but you can also carry over any excess amounts to future tax years. To avoid the pitfalls of the wash-sale rule when tax-loss harvesting, be sure not to buy the same or a similar security within 30 days before or after the realization of the loss.
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