Year-End Tax Moves You Must Make Before December 31st (2025 Edition)

Year-end taxes aren’t exactly the holiday vibe… but missing the right moves before December 31 hits harder than winter in the Northeast. The IRS doesn’t play around with deadlines, and truthfully, this is the moment when you can still change your 2025 tax outcome — lower what you owe, boost your refund, or set up a smoother 2026.

Think of this as your financial “clean-up playlist.” Short. Simple. And designed to save you money while everyone else is busy arguing about who’s bringing the mac and cheese to the holiday dinner.

1. Max Out (or Catch Up On) Your Retirement Contributions

Keyword match: year-end tax moves

Your 401(k) and traditional IRA contributions can reduce your taxable income — making this one of the most effective tax strategies still available before year-end.

• 2025 contribution limit for 401(k): Check the IRS chart here 

• Traditional IRA contribution rules 

• If you’re 50+, catch-up contributions can provide even more deductions.

If you’re still building your confidence with investing, check out our guide on how to start investing with just $100 to see how retirement accounts can fit into your bigger wealth plan.

Also see our guide on smart retirement saving.

2. Use Tax-Loss Harvesting to Offset Capital Gains

Selling losing investments to offset gains is perfectly legal and a time-tested tax strategy.

• IRS overview

• Offsets short- and long-term gains

• Can reduce taxable investment income for 2025

• Up to $3,000 can offset regular income

If you already have a brokerage account, check your 2025 gains. If you’re in the red, this move quietly saves you money without changing your long-term investing strategy.

3. Make Charitable Contributions Before the Deadline

If you itemize deductions, charitable giving still pays off — especially when done before December 31.

Examples include:

• Cash donations

• Donor-advised funds (DAFs)

• Clothing, electronics, or other goods (must be in “good condition” per IRS)

IRS documentation rules here: 

Charitable exemptions

Pro tip: If you’ve had a high-income year, DAFs let you take the 2025 deduction now while distributing donations over future years.

4. Prepay Certain Expenses to Boost Itemized Deductions

If you’re close to crossing the standard deduction threshold, prepaying certain costs can push you over the edge and make itemizing worth it.

Eligible prepayments may include:

• January mortgage payment

• Property taxes (if your state allows prepayment)

• Medical bills eligible for the 7.5% AGI deduction 

Just avoid prepaying more than one year of taxes — that’s not allowed.

To make sure cash is there when you need it, read our breakdown on budgeting on autopilot so your bill payments and savings stay in sync with your year-end tax strategy.

5. Review Your Withholdings Before Your W-2 Gets Locked In

If you owed taxes this year or got a monster refund, adjust your W-4 now so the final pay cycles reflect the right amounts.

IRS withholding calculator 

Small updates in December can fix big headaches in April.

6. Use Your FSA Before It Vanishes

FSAs are “use-it-or-lose-it” for most employers — and nobody wants to donate free money to HR.

Check:

• Remaining medical FSA balance

• Dependent care FSA deadlines

• Rollover limits or grace periods defined by your employer

Do more research at Healthcare.gov

7. Defer Income If You’re Self-Employed

If you run a business, freelance, or do side gigs, delaying invoices until January can lower taxable income for 2025 — especially if you’re expecting a lower bracket in 2026.

This applies to:

• Freelancers

• Consultants

• Online creators

• Contractors

• Small business owners

Read our guide on 2026 Wealth Goals: How to Build a Million-Dollar Mindset

If you’re still building your business or side income streams, our playbook on best side hustles for 2025 walks through options that pair well with smart tax planning.

8. Make Your Estimated Tax Payments Before January 15

Quarterly filers — this is your yearly reminder not to take the IRS’ smoke lightly.

If you owe use their IRS payment portal

Paying Q4 early (before Dec. 31) can benefit itemizers by boosting deductible state/local taxes.

9. Organize Every Tax Document Now (Before It Gets Chaotic)

This is the least glamorous move but arguably the most important.

Prepare:

• W-2s

• 1099-NEC, 1099-MISC, 1099-K

• 1098 (mortgage interest)

• Brokerage statements

• Charitable receipts

• Business expenses

• Mileage logs

• Health insurance forms

• Interest income statements

Organizing everything now helps prevent missed deductions and incorrect filings later.

FAQs About Year-End Tax Moves

1. Do these year-end tax moves apply to both employees and self-employed people?
Yes. Some moves benefit everyone (retirement contributions, charitable giving) while others are specifically for business owners (income shifting, quarterly taxes).

2. What is the deadline for most tax-saving actions?
December 31, 2025 — with the exception of IRA contributions, which can extend until April 15, 2026, depending on account type.

3. Should I take the standard deduction or itemize?
It depends on your total deductible expenses. The standard deduction often wins, but homeowners, high earners, and self-employed workers may save more by itemizing.

4. Are all charitable donations deductible?
Only donations to IRS-recognized 501(c)(3) nonprofits. Always keep receipts.

Financial Disclaimer

This article is for informational and educational purposes only. It is not financial, tax, or legal advice. Always consult a licensed tax professional or CPA regarding your personal tax situation.

Call to Action

If you want to go into 2026 with a clearer money plan, check out our free budgeting tools and savings guides inside the PersonalOne Finance Hub. Explore more in our [Taxes] category to stay ahead before filing season hits.