Tax Planning Tips Before the End of the Year
As the year winds down, it’s the perfect time to take proactive steps that could lower your tax bill and improve your financial outlook. Smart year-end tax planning can make a big difference come filing season. Here are key tips to consider before December 31st:
✅ 1. Max Out Retirement Contributions
Contribute as much as you can to your 401(k) or Traditional IRA before year-end to reduce your taxable income. For 2025, the contribution limits are:
401(k): Up to $23,000 (plus $7,500 catch-up if you’re 50+)
IRA: Up to $7,000 (plus $1,000 catch-up if you’re 50+)
💸 2. Harvest Investment Losses
If you’ve sold investments at a loss, you can use those losses to offset capital gains—and up to $3,000 of regular income. This strategy, known as tax-loss harvesting, can reduce your taxable income while keeping your portfolio on track.
🧾 3. Review Withholding and Estimated Taxes
Check if you’ve had enough taxes withheld from your paycheck or made sufficient estimated payments, especially if you’re self-employed or have freelance income. Adjust now to avoid penalties.
🎁 4. Make Charitable Donations
Donating to a qualified charity by December 31st can help reduce your taxable income if you itemize deductions. Consider donating appreciated assets for additional tax advantages.
🏥 5. Use Up FSA Funds
If you have a Flexible Spending Account (FSA), be sure to use your balance before it expires. Some plans allow a limited carryover or grace period—but not all.
📊 6. Plan for Big Life Changes
Had a major change like a new job, marriage, or new baby this year? These can all affect your tax bracket, deductions, or credits. Review your situation now to plan ahead.
Make the Most of Year-End Tax Moves
Year-end tax planning doesn’t have to be stressful. At SuperNOVA Tax Solutions, we help individuals and families take advantage of tax-saving opportunities before the clock runs out.