What if you could slash your 2025 tax bill by $5,000 or more in just the next few days? With only hours left until the calendar flips to 2026, there are still powerful, legal strategies you can use right now to lower your taxable income and boost your potential refund next year. Thanks to the One Big Beautiful Bill Act (OBBBA) signed in July 2025, this year brings exciting new opportunities—like deductions for tips, overtime, and more—that apply retroactively to all of 2025.
But time is running out for many classic year-end moves. Don’t leave money on the table! Here’s your urgent checklist of last-minute tax savers, optimized for the current rules.
1. Max Out Your Retirement Contributions – Instant Tax Savings
One of the easiest and most effective ways to reduce your 2025 taxes is by contributing to retirement accounts.
• 401(k), 403(b), or similar workplace plans: You have until December 31, 2025 to max out via payroll deductions. The limit is $23,500 (plus $7,500 catch-up if age 50+, or up to $11,250 extra if age 60-63 in some plans).
• Example: If you’re in the 24% tax bracket, maxing out saves you about $5,640 in federal taxes alone!
• IRAs: You have until April 15, 2026, to contribute up to $7,000 ($8,000 if 50+), but doing it now lets your money grow tax-deferred sooner.
Pro tip: If your plan allows after-tax contributions, consider a mega backdoor Roth for even more savings.
2. Harvest Tax Losses in Your Investments
Sell losing stocks or funds before midnight on December 31 to offset capital gains.
• You can deduct up to $3,000 in net losses against ordinary income.
• Carry forward any excess losses to future years.
• With markets volatile this year, many portfolios have unrealized losses—turn them into tax wins!
Avoid the wash-sale rule: Don’t repurchase the same security within 30 days.
3. Bunch Charitable Donations and Maximize Itemizing
The standard deduction for 2025 is generous ($15,750 single, $31,500 married filing jointly), but if you’re close to exceeding it, accelerate donations now.
• Donate cash, stocks, or goods by December 31 for a 2025 deduction.
• With OBBBA’s temporary raise of the SALT cap to $40,000 (for incomes under ~$500k-$600k, with phaseouts), high-property-tax payers in states like NY, CA, or NJ may now benefit from itemizing—bunch property tax payments or donations to push over the threshold.
Thought-provoking: Could appreciated stock donations save you more than cash? (Yes—avoid capital gains tax too!)
4. Bunch Medical Expenses If You’re Close to the Threshold
Medical expenses over 7.5% of AGI are deductible if itemizing.
• Schedule procedures, pay bills, or stock up on qualifying items before year-end.
• Especially useful if combining with higher SALT for itemizing.
5. Track and Document OBBBA’s New Retroactive Deductions
These game-changers apply to all of 2025 income, showing up on your 2026 return:
• No Tax on Tips: Deduct up to $25,000 in qualified tips (in customary occupations like service industry). Phaseouts start at higher incomes.
• Overtime Premium Deduction: Deduct the extra “half” in time-and-a-half (up to limits like $12,500 single).
• Car Loan Interest: Up to $10,000 deductible on qualifying US-assembled vehicles.
• Seniors’ Bonus: Extra $6,000 deduction if 65+.
Start gathering records NOW—pay stubs, tip logs, loan statements—for bigger refunds in 2026.
Quick Year-End Checklist
• Increase final paycheck retirement deferrals
• Sell losing investments
• Make charitable gifts (use donor-advised funds for bunching)
• Prepay property taxes or medical bills if itemizing
• Document tips, overtime, and car interest
These moves aren’t just about saving taxes—they’re about smart financial planning in a year of big changes from OBBBA. Many Americans could see record refunds in 2026 due to retroactive benefits and potential overwithholding.
What’s your biggest last-minute tax move this year? Share in the comments below—I’d love to hear! And if you’re worried about your specific situation, consult a tax professional ASAP.
Stay tuned for more 2025 tax tips as we head into filing season. Happy New Year—and here’s to a lower tax bill! 💰
(Note: This is general information based on current IRS rules as of December 2025. Tax laws are complex—always verify with a qualified advisor.)
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