As 2025 draws to a close, the clock is ticking on powerful tax-saving opportunities under the current rules shaped by the One Big Beautiful Bill Act (OBBBA). With potential shifts looming in 2026—such as new limits on charitable deductions and changes to certain credits—acting now could save you thousands in taxes.
These strategies are especially urgent if you’re a high earner, business owner, senior, or live in a high-tax state. Don’t leave money on the table: Review your situation and consult a tax professional to implement these before midnight on December 31.
Here are 7 proven last-minute moves to potentially lower your 2025 tax bill significantly:
1. Max Out Retirement Contributions
Contributions to retirement accounts like 401(k)s or IRAs reduce your taxable income dollar-for-dollar.
• For 2025, you can contribute up to $23,500 to a 401(k) (plus catch-ups: $7,500 if 50+, or up to $11,250 if 60-63).
• IRAs allow $7,000 ($8,000 if 50+).
Example: A 55-year-old in the 24% tax bracket contributing the max to a 401(k) could save over $7,000 in taxes alone—not counting growth.
Deadline: December 31 for most workplace plans; IRA contributions can extend to April 2026, but do it now for peace of mind.
2. Leverage the Expanded SALT Deduction (If You Itemize)
Thanks to OBBBA, the state and local tax (SALT) deduction cap jumps to $40,000 in 2025 (from $10,000 previously), though it phases out for incomes over $500,000.
If you live in high-tax states like California, New York, or New Jersey, prepay 2026 property taxes or estimated state taxes before year-end to bunch into 2025 and maximize this temporary boost.
Pro Tip: Compare itemizing (with SALT + mortgage interest + charity) vs. the boosted standard deduction ($15,750 single / $31,500 joint). Many will switch to itemizing this year.
3. Accelerate Charitable Donations
Cash donations to qualified charities are deductible up to 60% of AGI if you itemize. With new floors and limits kicking in for 2026, bunching multiple years’ gifts into 2025 maximizes deductions now.
Use a donor-advised fund to donate now (get the deduction) but distribute later.
Savings Example: Donating $20,000 in appreciated stock avoids capital gains tax and deducts the full market value.
4. Take Advantage of 100% Bonus Depreciation for Business Assets
OBBBA restores 100% bonus depreciation for qualified equipment and property placed in service in 2025.
Business owners: Buy and install machinery, vehicles, or office furniture before year-end to deduct the full cost immediately via Section 179 (up to higher limits) or bonus depreciation.
This is huge for cash flow—don’t delay purchases planned for early 2026.
5. Harvest Tax Losses in Investments
Sell losing investments to offset capital gains (and up to $3,000 of ordinary income). Excess losses carry forward.
With markets volatile, review your portfolio now. Pair with gains you’ve realized this year for a net zero tax hit.
6. Claim New OBBBA Deductions If Eligible
• Seniors (65+): Extra $6,000 bonus deduction (on top of standard or itemized).
• Tipped Workers: Exclude qualified tips from taxable income.
• Overtime Pay: Deduct the premium portion (e.g., time-and-a-half’s “half”).
• Car Loan Interest: Up to $10,000 deductible on qualifying U.S.-assembled vehicles.
Track these if they apply—many overlook them!
7. Bunch Medical Expenses or Other Deductibles
Medical expenses over 7.5% of AGI are deductible if itemizing. Schedule elective procedures or pay bills before year-end if close to the threshold.
Final Thoughts: Act Now for Maximum Savings
These moves aren’t just about 2025—they position you better for future changes under OBBBA. Run the numbers: A family making smart use of retirement maxing, SALT bunching, and charity could easily save $10,000+.
Checklist:
• Review contributions
• Prepay deductible expenses
• Sell losses
• Donate
• Buy business assets
Every situation is unique—consult a CPA to avoid pitfalls and ensure compliance.
What’s your top year-end tax move this December? Share in the comments, and subscribe for more tips to keep more of your hard-earned money!
Disclaimer: This is general information, not personalized tax advice. Rules are based on current law as of December 2025.
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