With 2025 quickly winding down you still have some time to lower your tax bill and help plan for the years ahead. With some new opportunities due to the One Big Beautiful Bill Act these 8 tax tips can help you finish this year strong and help put your best foot forward in 2026.

1. Max Out Tax-Advantaged Contributions

  • Employer Sponsored Retirement Accounts: Contribute to 401(k), 403(b), or other workplace plans by Dec. 31, 2025. The limit is $23,500 (plus $7,500 for those 50+). If you’re age 60–63, take advantage of the new ‘super catch-up’ rule — an extra $11,250 on top of your standard limit. That can translate into thousands in additional tax-deferred savings right before retirement.
  • Health Savings Accounts (HSAs): For high-deductible plans, contribute up to $4,300 (self) or $8,550 (family) by the April 2026 tax deadline. Note the triple tax benefit of HSA accounts: Contributions reduce taxable income, funds can be invested and grow tax deferred, and withdrawals for qualified health expenses are tax free.
  • OBBA highlight: Starting on January 1, 2026, you can withdraw up to $150 per month ($300 for couples) from an HSA tax-free to pay monthly or annual fees for direct primary care arrangements (also known as concierge medicine).
  • Individual Retirement Accounts (IRA’s): Contribute up to $7,000 (plus a $1,000 catch up for those age 50 and older) by the April 2026 tax filing deadline. Note income thresholds for contributions and tax deductibility especially if you are actively contributing to an employer sponsored plan. Here’s a resource to help you decide between a traditional IRA or Roth IRA.

Once your contributions are maxed, it’s time to look at what assets you can harvest for tax efficiency.

2. Use Tax-Loss Harvesting

Tax-loss harvesting allows you to offset investment gains by selling underperforming investments. Losses can also offset up to $3,000 of ordinary income annually. In addition, unused losses can be carried forward indefinitely. This can be important if you are in need of diversifying out of concentrated positions or looking for an offset for any vested equity compensation that might bump you into a higher marginal income tax bracket. Just beware of wash sale rules.

Now that you’ve explored harvesting, the next step is to be strategic in determining whether to take the standard deduction or itemize.

3. Assess The Benefit of Itemizing vs. Taking the Standard Deduction

With the standard deduction at $15,000 for single filers and $30,000 for married filing jointly, many families need to think strategically when itemizing deductions. If you are charitably inclined, a great way to take advantage of itemizing is through bunching or batching donations. Bunching allows you to consolidate multiple years’ donations into one year so that you can be strategic about using the standard deduction in years where it would be more advantageous. Charitable donation vehicles like donor-advised funds can offer you flexibility.

OBBA highlight: With the new charitable giving limitations taking effect in 2026 – where only gifts exceeding 0.5% of Adjusted Gross Income will qualify for deductions and an itemized deduction cap set at 35% rate for high earners – some individuals now have a strong incentive to consider applying this strategy for 2025.

Now that we’ve explored that, let’s consider additional opportunities to lower taxable income.

4. Defer Income

Freelancers or gig workers can consider delaying billing until 2026 to reduce 2025 taxable income. W-2 employees may be able to defer bonuses and other compensation (explore options with your manager or HR). Consult a tax advisor to ensure this aligns with your goals and expected future tax brackets. If it is too late for this year, add it to your planning for next year.

Next, let’s consider opportunities to decrease our tax burden in the future.

5. Consider A Roth Conversion

With lower marginal tax brackets now made permanent due to the passing of the One Big Beautiful Bill Act, Roth conversions can be part of a longer term tax savings strategy, as they’ve become or continue to be “cheaper” to convert. Taxes are due on the conversion, but future growth and withdrawals are tax-free after five years and age 59 1/2. Use a calculator like this to help illustrate the potential benefit for your situation based on where your tax rates are now, future expectations, and your investment time horizon.

Now that we’ve explored Roth conversion as part of a longer-term strategy, let’s explore areas that typically impact the more mature phases of retirement.

6. Take Required Minimum Distributions

If you are 73 or older, withdraw your RMD by December 31 to avoid penalties. Plan carefully to see if this is your first RMD, as deferring until April 1 of the following year may result in two withdrawals in one year, which can increase your taxable income for that year.

7. Reduce Required Minimum Distributions (RMDs)

You can donate up to $108,000 via a qualified charitable donation (QCD) if you are above age 70 1/2. If you are married filing jointly you can each donate up to $108,000 (Up to a $216,000 donation) from your IRA to a qualified charity to satisfy RMD requirements. The donated amount is excluded from taxable income and does not trigger income taxes or Medicare surtaxes.

Here are some other ways to help reduce taxes on RMDs with careful planning.

8. Gift To Loved Ones and Update Your Estate Planning Strategy

Gift up to $19,000 per recipient (2025 limit) to reduce your estate’s taxable value. Married couples can gift up to $38,000 per recipient. While you don’t get an income tax deduction for these gifts, the recipient won’t owe taxes, and the gift can help reduce the value of your estate without using up your lifetime gift and estate tax exemption.

Important to Note: Beginning in 2026, the unified lifetime gift, estate, and generation-skipping transfer exemption rises to $15 million per person ($30 million per couple). Unlike previous temporary increases, this exemption is now permanent and indexed for inflation. Now is the time to update your estate planning strategy and legal documents to reflect any changes you decide to make.

Your Next Moves:

  1. Run a tax projection: Run a quick estimate of your 2025 and 2026 taxable income to optimize the timing of income, expenses, deductions, and qualified plan contributions. You might find you still have room for Roth conversions.
  2. Review your investments: Scan your investments, and where applicable use tax loss harvesting strategies to offset realized gains and reduce taxable income.
  3. Review and apply charitable giving strategies: Bunch charitable gifts into 2025 to maximize deductions before the new limitations begin in 2026. If applicable consider a QCD and other strategies to reduce required minimum distributions and lower your tax bill.
  4. Defer income strategically: Whether you are self-employed or a W-2 employee – consider smoothing out your realized income into future years to better control your tax bill.
  5. Estate Planning Updates: Consider annual exclusion gifts ($19k/$38k)) and review your current estate planning strategies given the new permanent $15 million/$30 million exemption.

Take This Opportunity to Plan For 2026 And Beyond

The end of the year is more than a deadline— it’s a planning opportunity. It’s a perfect time to use these tax tips to your advantage and reduce your immediate tax burden while building flexibility for the years ahead.

If you need help, I encourage you to work with a trusted and qualified tax professional to ensure you incorporate all of the tax saving opportunities that might exist for you and make the most of a dynamic tax environment.

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