As the year draws to a close, now is the perfect time to take proactive steps to maximize your tax refund and minimize your tax burden for the upcoming year. Whether you’re an individual or a small business owner, there are simple yet effective strategies you can implement to ensure you keep more of what you’ve earned. November is the time to get organized and start planning for your 2025 tax return with these actionable tips. Consider these year-end tax tips for effective planning.

Many people search for ways to save on taxes, especially as the end of the year approaches. From making smart retirement contributions to leveraging tax credits, here are the key moves to make before December 31 to get tax-ready for 2025.

Top Year-End Tax Tip for Individuals and Small Business Owners

Contributing to a tax-advantaged retirement account, such as an IRA or 401(k), is one of the most effective ways to reduce your taxable income. For 2024, individuals can contribute up to $6,500 to a traditional or Roth IRA, or up to $22,500 to a 401(k) plan (with an additional catch-up contribution if you’re over 50). These contributions not only help you save for the future but also provide an immediate tax break if made by the December 31 deadline. Implementing such year-end tax tips can be very beneficial.

Tip: If you haven’t maxed out your contributions, now is the time to do so. Every dollar you contribute reduces your taxable income, potentially lowering your overall tax liability.

If you’ve sold investments at a profit this year, it’s important to review your portfolio for any losses you can claim to offset those gains. This strategy, known as tax-loss harvesting, allows you to sell underperforming assets and reduce your taxable income. You can deduct up to $3,000 in capital losses against ordinary income per year, and any excess can be carried forward to future years.

By balancing gains and losses, you can reduce the taxes owed on profitable investments while cleaning up your portfolio.

Giving back to charity is not only a noble act but also a smart tax strategy. Charitable donations made by December 31 are eligible for a tax deduction. This includes donations of cash, goods, and even appreciated stock. To claim the deduction, ensure you donate to a qualified charitable organization and obtain a receipt for any contributions made.

Bonus: Donating appreciated stock can be particularly beneficial, as you avoid paying capital gains taxes on the appreciation and still receive a full deduction for the current value of the stock.

Tax credits are a powerful tool to reduce your tax bill dollar-for-dollar, and some expire at the end of the year. Popular credits to consider include:

• Energy-efficient home improvements: If you’ve made upgrades to your home, such as installing solar panels or energy-efficient windows, you may qualify for federal tax credits. Considering such Year-End Tax Tips can be very effective.
• Education credits: If you or a dependent are paying tuition for college or continuing education, you may be eligible for the Lifetime Learning Credit or the American Opportunity Credit.
• Child and dependent care credit: If you’ve paid for child care or dependent care services, you may be eligible for this valuable tax credit.

Acting before December 31 allows you to claim these credits on your 2024 tax return, potentially lowering your tax liability.

Avoid an unexpected tax bill by reviewing your withholdings and estimated tax payments. If you’re an employee, check your most recent pay stub to ensure enough taxes are being withheld from your paycheck. If you’re self-employed, verify that your estimated payments are on track to cover your expected tax liability for the year.

Adjusting your withholdings or making an additional estimated tax payment before the end of the year can help you avoid penalties and ensure you aren’t caught off guard come tax season.

Start Now: Apply These Year-End Tax Tips for a Better Financial Future

By taking action on these tax-saving strategies in November, you can set yourself up for a better financial start in 2025. These simple steps—whether maximizing retirement contributions, harvesting capital losses, or taking advantage of valuable tax credits—can help you reduce your taxable income and potentially increase your tax refund.

Looking for more detailed guidance? Our comprehensive year-end tax tips will walk you through each strategy, helping you make the most of your tax savings. Start your planning today, and ensure you’re ready for a smoother, more tax-efficient year ahead.