Year-End Tax Savings
As the end of the year approaches, it’s natural to reflect on our financial successes—and to look for smart ways to save on taxes. The clock is ticking, but here are five strategies you may want to consider before year-end.
#1… Charitable Giving Opportunities Are Changing
The rules around charitable giving are shifting next year. Those in higher tax brackets could be surprised by how much of their usual deductions may be reduced.
So… If you don’t anticipate major changes in your income, you may want to consider accelerating your charitable giving to capture the maximum tax benefit now. One option is using a donor-advised fund, which allows you to take the deduction today while maintaining flexibility to distribute funds to your chosen charities later. This strategy can be even more powerful if you contribute appreciated stocks or other securities—you receive the charitable deduction and avoid paying capital gains tax on those assets.
#2… Itemized Deduction Rules Are Also Changing
Itemized deductions are evolving next year as well, and again, higher-income earners may feel the impact. The good news is that the state and local tax (SALT) deduction limit has increased to $40,000 for 2025.
So… If your income is expected to remain stable, consider prepaying some state and local taxes this year to take full advantage of the increased deduction.
#3… Leverage Your Investments and Retirement Accounts
Your investment and retirement portfolios offer several opportunities to reduce taxes—both now and in the future.
So… Ask yourself:
Can you harvest any investment losses to offset gains?
Are you maximizing your retirement contributions? You may be able to fully fund both your employer-sponsored plan and an additional retirement account, such as a traditional or Roth IRA.
Are you eligible to contribute to a Health Savings Account (HSA)? If so, make sure you’re maximizing this powerful, tax-advantaged tool.
#4… Think Carefully Before “Buying for the Deduction”
You’ve probably heard the age-old advice to buy equipment before year-end—whether it’s a John Deere for farming and ranching or other business equipment. While this can reduce taxes, it’s not always the right move.
So… Timing and purpose matter. Ask yourself whether you would still need the equipment if there were no tax benefit. Depreciation exists for a reason—equipment loses value over time, and that loss must be weighed against the tax savings. If it’s not a sound business decision, it may not be the right decision at all.
Another option is managing the timing of income and expenses. Consider deferring income if this year’s earnings are unusually high, or prepaying unavoidable expenses such as rent or taxes. The bonus? You may be able to repeat this strategy next year if needed. It truly can be the year-end gift that keeps giving.
#5… Don’t Go It Alone
There’s real wisdom in seeking professional guidance.
So… Talk with your tax planner, accountant, or tax preparer about the opportunities they see. They understand your financial situation better than anyone else and can help you make informed decisions.
As Jennifer Aniston once said, “When you try to avoid the pain, it creates greater pain.” There may be no truer statement when it comes to tax planning. Yes, the clock is ticking on 2025—but doing nothing could create far greater pain later.