10 Year-End Tax Moves Your Tax Consultant Wants You to Make Before 2025 Ends

As the end of 2025 approaches, it's crucial to take strategic steps to optimize your tax situation income, maximize deductions, and position your finances advantageously for the coming year. Here are 10 important tax moves your tax consultant wants you to consider before December 31, 2025, plus a bonus round of quick tips.with your tax consultant or advisor. Making key year-end tax moves can lower your taxable 

Move #1: Max Out Retirement Contributions Before Midnight Dec 31

Maximizing assistance to retirement accounts like 401(k)s, IRAs, and SEP IRAs before year-end reduces your taxable income for 2025. These tax-advantaged accounts allow you to defer taxes on earnings and potentially lower your overall tax bill. For 2025, contribution limits have increased in many plans, so aim to contribute the maximum allowable amount to harness the full tax benefit. Consult your tax advisor on whether traditional (pre-tax) or Roth (post-tax) contributions align best with your tax strategy, given your current and expected future tax brackets.

Move #2: Harvest Tax Losses (and Gains) in Taxable Accounts

Tax-loss harvesting concerns selling investments at a loss to offset capital gains or more inferior taxable income, thereby minimizing your tax liability on investment earnings. The key is to strategically realize losses while avoiding wash sale rules, which disallow deductions if you repurchase the same or substantially equivalent securities within 30 days. Additionally, recognizing gains up to a certain threshold can be beneficial if you foresee higher tax rates, locking in current lower rates. Your tax expert can help evaluate your portfolio to identify opportunities for harvesting gains and losses before year-end.

Move #3: Bunch Charitable Donations & Use Appreciated Stock

Bunching charitable donations into one tax year enables you to itemize deductions and exceed the standard deduction threshold, increasing tax savings. Instead of giving small amounts annually, consolidate donations to maximize deductions in 2025. Consider donating relished stock held for over a year instead of cash to avoid capital gains taxes on the appreciation while still acquiring a full charitable deduction based on the stock’s fair market value. For donors nearing Required Minimum Distributions (RMDs), Qualified Charitable Distributions directly from IRAs to charities can effectively reduce taxable income.

Move #4: Prepay 2026 Property Taxes & State Income Taxes

If you itemize deductions, prepaying property taxes and state income taxes due in early 2026 before December 31, 2025, can accelerate deductions into this tax year. This move can be especially helpful if you expect to be in the same or a higher tax bracket next year. However, remember that the State and Local Tax (SALT) deduction cap remains capped at $10,000 federally (indexed for inflation and with some recent increases), so plan accordingly. Coordinate with your tax professional to determine if prepaying is advantageous given your overall tax picture and state laws.

Move #5: Accelerate Business Expenses & Equipment Purchases

For business owners, accelerating deductible expenses like office supplies, software, and business-related travel into 2025 can reduce taxable income. Additionally, purchasing qualifying equipment before year-end lets you benefit from 100% bonus depreciation and the increased Section 179 expense limits, which allow immediate expensing rather than capitalizing and depreciating over time. The 2025 Section 179 limit is $2.5 million, with a total equipment purchase cap at $4 million, so leverage this opportunity to maximize deductions and reduce tax liabilities.

Move #6: Complete Energy-Efficient Home Improvements

Certain energy-efficient home improvements are eligible for tax credits that can instantly reduce your tax bill. Completing qualifying upgrades—such as solar panels, heat pumps, or energy-efficient windows—before December 31 allows you to claim available credits on your 2025 tax return. These incentives help promote greener living while decreasing taxes. Consult your tax advisor and review IRS guidelines to ensure improvements meet eligibility and documentation requirements.

Move #7: Fund 529 Plans for State Tax Deduction + New Federal Rules

Contributing to 529 college savings plans before year-end offers state tax deductions or credits in many states, creating upfront tax savings. Additionally, under new federal rules, 529 plan balances held for at least 15 years can now be rolled into a beneficiary's Roth IRA under certain conditions, enhancing long-term flexibility. Funding 529s before the year ends may qualify for this and other benefits, so coordinate with your tax professional to optimize contributions based on your state’s offerings and family goals.

Move #8: Execute Roth Conversions Before RMD Age

If you expect your tax rate to increase or want to reduce future tax burdens, converting traditional IRA or 401(k) funds to a Roth IRA can be a smart move. Roth conversions are taxable events, but the assets grow tax-free afterward, and there are no required minimum distributions during the original owner’s lifetime. Completing conversions before reaching the age for Required Minimum Distributions (which generally starts at age 73 for 2025) allows you to manage future taxes more effectively. Your tax advisor can help calculate the optimal conversion amount to avoid bumping you into a higher tax bracket.

Move #9: Set Up the Correct Entity & Retirement Plan Before Year-End

Entrepreneurs and small business owners should evaluate whether their current business entity structure (S-Corp, LLC, C-Corp) remains optimal for tax purposes. Making entity elections or restructuring before year-end can improve tax efficiency and compliance. Additionally, setting up a retirement plan, such as a SEP IRA, SIMPLE IRA, or solo 401(k), by December 31 allows you to make tax-deductible contributions for 2025. These moves reduce taxable income, build business owner retirement savings, and may qualify for additional tax credits.

Move #10: Double-Check HSA Contributions & Medical Expenses

Health Savings Accounts (HSAs) offer triple tax advantages: contributions are pre-tax or deductible, funds grow tax-free, and withdrawals for eligible medical costs are tax-free. Maxing out your HSA contributions by December 31 boosts these benefits and can buffer future healthcare costs. Additionally, keeping track of out-of-pocket medical expenses that exceed 7.5% of Adjusted Gross Income (AGI) could allow you to itemize deductions. Consult your tax advisor to confirm contribution limits and ensure all eligible medical savings take advantage of deductions and credits this year.

Bonus Lightning Round

• Review your withholding and assessed tax payments to avoid underpayment penalties.
• Consider gifting up to the annual tax-free limit of $19,000 per recipient to reduce estate taxes.
• Evaluate incentive stock options and exercise timing to manage AMT exposure.
• Donate partial interests in real estate or artwork for specialized charitable deductions.
• Plan to dispose of passive activity losses to unlock suspended losses.

Conclusion

Year-end tax planning requires careful coordination with your tax consultant to navigate changing tax laws and optimize your tax savings. From maximizing retirement contributions to strategically timing income and deductions, these 10 moves can significantly reduce your 2025 tax bill and position you for a stronger financial future. Engage your tax advisor today to review your unique situation, implement these moves before December 31, and enter 2026 with confidence and clarity.

This detailed guide combines actionable tax-planning steps, updated contribution limits, recent legislative changes, and strategic considerations informed by current tax regulations and expert advice.