As 2025 draws to a close, the clock is ticking on opportunities to reduce your tax liability for the year. With just days left before December 31, smart, actionable strategies can still make a significant difference—potentially saving you hundreds or even thousands on your 2025 taxes.
Thanks to the One Big Beautiful Bill Act (OBBBA), signed into law earlier this year, there are exciting new deductions for tipped workers, overtime pay, and seniors, plus an expanded state and local tax (SALT) deduction in many cases. But many classic year-end moves remain powerful, especially as we head into a new tax landscape in 2026.
Don’t leave money on the table. Here are five proven last-minute tax moves you can implement before the ball drops on New Year’s Eve. Act fast—these must generally be completed by December 31, 2025, to count for this tax year.
1. Harvest Tax Losses (and Consider Gains) in Your Investment Portfolio
With markets fluctuating this year, now’s the perfect time for tax-loss harvesting: Sell investments at a loss to offset capital gains and up to $3,000 of ordinary income.
• Review your brokerage account for underperforming stocks, bonds, or funds.
• Sell losers before December 31 to lock in losses for 2025.
• Be mindful of the wash-sale rule: Don’t repurchase the same or substantially identical security within 30 days.
If you’re in a lower tax bracket or have no gains to offset, consider tax-gain harvesting—selling winners to realize gains tax-free (up to the 0% long-term capital gains threshold).
Potential savings: Thousands, depending on your portfolio. This is one of the few moves you can still make in the final days of the year.
2. Max Out Retirement Contributions and Accelerate Deductible Expenses
Contributions to workplace plans like 401(k)s or 403(b)s must be made by December 31 for 2025 credit (up to $23,500, plus catch-up if eligible).
• Contact HR or your plan administrator today to increase deferrals from your final paycheck(s).
• For self-employed? SEP-IRA contributions can go until your filing deadline, but traditional moves like equipment purchases qualify for bonus depreciation under OBBBA extensions.
Accelerate other deductions if itemizing:
• Prepay January 2026 mortgage interest or property taxes (watch SALT limits—the OBBBA raised it significantly for many).
• Bunch medical expenses or charitable donations to exceed thresholds.
Pro tip: If you’re 73+, take your required minimum distribution (RMD) by Dec 31—or consider a Qualified Charitable Distribution (QCD) up to $108,000 to satisfy it tax-free.
3. Bunch Charitable Donations for Maximum Impact
Charitable giving is a classic year-end strategy, especially with OBBBA changes potentially affecting future deductions.
• “Bunch” multiple years’ worth of donations into 2025 to push you over the standard deduction ($15,750 single/$31,500 joint for 2025) and itemize.
• Donate appreciated stock: Avoid capital gains tax while deducting fair market value.
• For non-itemizers: Limited above-the-line deductions may apply, but itemizing often yields more.
With potential shifts in 2026 (including phaseouts on some breaks), accelerating gifts now could maximize benefits under current rules.
Example: Donate $20,000 in appreciated securities instead of cash—deduct the full value and skip gains tax.
4. Leverage New OBBBA Breaks: No Tax on Tips, Overtime, and Senior Bonuses
The OBBBA introduced game-changing deductions retroactive to 2025—perfect for last-minute planning.
• No tax on tips (up to $25,000): Tipped workers—track and report qualified tips received in 2025 for a full deduction (phases out at higher incomes).
• Overtime premium deduction: Deduct the “half” portion of time-and-a-half pay (up to limits)—gig workers and hourly employees, review paystubs now.
• Senior bonus deduction: If 65+, claim an extra $6,000 ($12,000 joint) on top of the standard amount—automatic for qualifiers.
These are temporary (through 2028 in many cases), so documenting 2025 earnings accurately is key for your upcoming filing.
Thought-provoking question: Will these worker-focused breaks truly boost take-home pay long-term, or add complexity? Many experts say the retroactive nature means bigger refunds in 2026!
5. Prepay Qualifying Expenses and Defer Income Where Possible
Shift the timing:
• Prepay 2026 state estimated taxes or property taxes (if itemizing and under expanded SALT caps).
• Delay bonuses or invoices until January 2026.
• If self-employed, stock up on business supplies or equipment eligible for 100% bonus depreciation.
For high earners, consider Roth conversions before year-end if rates feel favorable now.
Final Thoughts: Don’t Wait—Act Before Midnight on December 31
These moves aren’t just about saving on 2025 taxes—they position you better for 2026, where OBBBA makes many TCJA cuts permanent while introducing new phaseouts.
Every situation is unique, so consult a tax professional to tailor these to your circumstances and avoid pitfalls.
What’s your biggest year-end tax worry? Drop a comment below—let’s discuss! And subscribe for daily tax tips to navigate 2026 filing season like a pro.
Disclaimer: This is general information, not personalized tax advice. Rules can change; verify with the IRS or a qualified advisor.
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