Year-End Tax Moves to Lower Your 2025 Tax Bill

As 2025 winds down, it’s the perfect time to take a proactive look at your taxes before December 31. Whether you are a small business owner, independent professional, or high-income earner, your year-end decisions can make a big difference in how much you owe or save when filing next spring.

Smart tax planning is not just about compliance. It is about being intentional, using the tax code to protect and grow what you have earned. Here are five practical strategies to consider before the year ends.

1. Maximize Business Deductions

If you have been delaying equipment or software upgrades, now may be the best time. Thanks to Section 179 and bonus depreciation, you can deduct up to 100% of the cost of qualifying assets purchased and placed in service by December 31.

This includes items like computers, office furniture, and even vehicles used for business purposes. Keep detailed receipts and records to make sure you capture every deduction you are entitled to.

2. Contribute to Retirement Accounts

Do not overlook the power of retirement contributions as a tax-saving tool.
Self-employed individuals can contribute to a Solo 401(k) or SEP IRA, reducing taxable income while building long-term financial security.

For example, contributing $20,000 to your Solo 401(k) could potentially save thousands in taxes, depending on your income bracket. Even traditional IRAs can provide immediate tax benefits while your investments grow tax-deferred.

3. Review Your Estimated Taxes

If your income changed this year, it is important to review your estimated tax payments. Underpayment penalties can add up fast if your quarterly payments have not kept pace with your earnings.

A quick year-end review with your CPA can ensure you have paid enough to avoid surprises and help you plan for any last-minute adjustments before December 31.

4. Accelerate Charitable Giving

Charitable giving remains a powerful way to make an impact and reduce your taxable income. Donating cash, stock, or other appreciated assets before year-end can earn you a deduction while helping a cause you care about.

If you are unsure where to give, consider donor-advised funds (DAFs). They allow you to make a tax-deductible donation now and distribute funds to charities later, which is ideal for long-term giving plans.

5. Plan Ahead for 2026 Tax Changes

The Tax Cuts and Jobs Act (TCJA) provisions are set to expire in 2026, potentially raising individual and business tax rates. Taking advantage of current deductions, lower brackets, and expanded credits now can position you ahead of those changes.

A strategic discussion with your CPA can help you identify opportunities to defer income or accelerate deductions depending on your unique situation.

Final Thoughts

Year-end planning is your opportunity to be intentional, not reactive, about your taxes. A few smart moves now can mean meaningful savings later.

Ready to see how much you can save?