9 year-end tax tips for 2025

The new year is almost here, which means a new tax season is about to kick off. As many as a third of Americans put off doing their taxes until the last minute, according to a survey by Investment Property Exchange Services. But procrastinating won't just add to your stress level — it could mean missing out on crucial tax breaks that require money moves before the end of the year.

Federal tax returns for tax year 2025 aren't due until April 15, 2026. But there's plenty you can do now to maximize your refund and make the process less stressful.

What was 2025 like for you? Did you lose your job or get a raise? Get married or buy a house? Have a baby or start paying student loans? Big changes like these have big implications for your tax return.

One of the first things to decide is if you'll itemize your tax deductions. Many tax breaks require itemization, but it doesn't make sense to claim them if they don't add up to more than the standard deduction.

If you are itemizing, start gathering documents now. Make sure your student loan provider, mortgage servicer and others have your current address and email so you'll get the forms you'll need when filing.

If you plan to deduct charitable donations, make sure you still have the receipts or contact the organization for replacements. The same is true if you plan on deducting medical or dental expenses.

Create a checklist of any W2s, 1099s or other tax forms you expect to receive, most of which should arrive by the end of January.

By this point in the year, you should be able to approximate your total income for 2025. That will determine what tax brackets you're in and give you an idea of whether you should expect a refund or start setting aside money to pay the IRS in April. 

W2s, 1099s, and other IRS documents roll out in January, but you can estimate your income by checking your last pay stub for year-to-date earnings or reviewing your company's payroll site. For freelance work, you'll need to go through your bank statements or invoices. Be sure to add any payments expected before the end of the year to your tally.

TurboTax and TaxAct both have free online tax calculators that can help you estimate your bill or refund.

One thing that can't wait until the new year is your 401(k). Your contributions are made with pre-tax dollars, which lowers your taxable income. But only contributions made by December 31 will count for the 2025 tax year. 

Go to your company's intranet site or talk to human resources about last-minute contributions. In 2025, you can defer up to $23,500 into your 401(k) plan, although employees 50 and older can defer an extra $7,500 in catch-up contributions.

While we associate Health Savings Accounts (HSAs) with medical expenses, you can make withdrawals for any reason once you turn 65. That makes them an enticing option for retirement planning.

You can deduct up to $8,550 in HSA contributions if you have an eligible high-deductible family health insurance plan or up to $4,300 for an individual plan. (If you're 55 or older, you can make up to $1,000 in additional catch-up contributions.)

IRAs are usually tax-deferred, but unlike 401(k) plans, they're controlled by you, not your employer. There's no employer match and contribution limits are lower, but IRAs usually offer more investment options and you can keep the same plan even if you change jobs.

Many people have both an IRA and a 401(k) to diversify their portfolio. You can keep contributing to your IRA and HSA until April 15, but capping out now ensures you won't miss the cut-off.

The IRS requires seniors to start withdrawing from their retirement accounts once they reach 73. Your Required Minimum Distribution (RMD) is determined by dividing the total balance in your accounts at the end of the prior year by your life expectancy, as determined by the IRS.

If you're 75 and single, for example, the IRS says you can expect to live another 24.6 years. If the balance in your IRA at the end of 2024 was $150,000, you would divide $150,000 by 24.6 years to get an RMD for 2025 of $6,098.

RMDs are taxed like regular income and a large one could bump you into a higher tax bracket. 

These withdrawals need to be made by December 31. If you fail to make your full distribution, the IRS could slap you with a penalty of 25% of the amount you need to withdraw. (You might be able to get the penalty waived or reduced, but it's better not to risk it.)

One of the best options is to put the money into a high-yield savings account, where it can grow while still remaining easily accessible.

You can also satisfy all or part of that RMD by making a qualified charitable distribution (QCD) directly from your IRA to an eligible nonprofit. You can't write off the donation, but the money won't add to your taxable income.

The limit for QCDs in 2025 is $108,000 per person or $216,000 for married couples.

Roth IRAs have advantages over traditional IRAs, most notably that withdrawals are tax-free and there's no required minimum distribution once you turn 73.

You're allowed to convert funds in a traditional IRA to a Roth account, though you'll have to pay taxes on the money. If you think tax rates will go up, doing it now is smarter than waiting.

College costs continue to skyrocket but a 529 plan allows parents to set aside tax-free savings that can be used to pay for their children's tuition and other eligible education expenses.

If you already have a 529 plan and some discretionary funds, now is a good time to add more to the account. There's technically no annual limit, but only contributions of up to $19,000 per donor qualify for the annual gift tax exclusion.

If you sold off stocks at a profit this year, you'll need to pay the capital gains tax. But if you have shares, cryptocurrency or other investments you're losing money on, you could sell them and use that loss to offset the income you made.

This strategy, known as "tax loss harvesting," can reduce your tax burden. But there are limits to how much you can write off.

Now is the time to talk to your accountant or financial advisor about realizing your capital gains.   

If charitable giving is a part of your tax plan, you don't have much time to act. The IRS lets taxpayers deduct cash donations of up to 60% of their adjusted gross income (AGI) and services or goods of up to 50%, depending on the type and recipient. Any contribution must be made to an eligible 501(c) (3) organization and include proper documentation.

If you donate long-term appreciated assets, like stocks or real estate, you won't have to pay the capital gains tax on them. You'll also get a deduction based on their fair market value, up to 30% of your AGI.

Now is the time to decide whether you'll be doing your taxes yourself or working with an accountant. If you're flying solo, be sure to review CNBC's picks for the top tax prep software to see which is best for your situation and budget.

If your finances are more complex — or you just want the confidence of working with an expert — start asking your friends and colleagues if they have a recommendation. The IRS maintains a directory of certified tax professionals that you can use to double-check any referrals.

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