As the year draws to a close, it’s the perfect time to review your finances and make sure you’re taking advantage of every available tax-saving opportunity. Many valuable strategies must be completed by December 31st, while a few others can still be handled by the April 15th tax filing deadline. Here are some of the most important year-end items to consider:
Before December 31
- Maximize Your Employer-Sponsored Retirement Plan Contributions
If you participate in a 401(k), 403(b), SIMPLE IRA, or similar employer plan and are not yet on track to maximize your contributions by year-end, consider increasing your contribution rate – if your employer allows mid-year changes. Contributing more helps build your retirement savings while also providing tax advantages — pre-tax contributions reduce your current taxable income, and Roth (after-tax) contributions allow for tax-free growth and future withdrawals.
- Contribute to Your Health Savings Account (HSA) Through Payroll
If you’re enrolled in a high-deductible health plan, and you are not on track to maximize your HSA contributions by year-end, consider increasing your contribution rate – if your employer allows mi-year changes. HSAs are a powerful tax tool—contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free. The 2025 contribution limits are $4,300 for self-only coverage and $8,550 for family coverage, plus an additional $1,000 catch-up if you’re age 55 or older.
- Make Qualified Charitable Distributions (QCDs)
If you’re age 70½ or older, you can make charitable donations directly from your IRA (up to $100,000) and have them count toward your Required Minimum Distribution (RMD) without increasing your taxable income. This can be an especially effective way to be charitable while lowering your tax bill.
- Use Your Flexible Spending Account (FSA)
If you have an FSA through your employer, check your balance. Most plans are “use it or lose it,” meaning funds not spent by year-end (or a short grace period, if offered) will be forfeited. Schedule any remaining medical or dental appointments and stock up on eligible items.
- Contribute to a 529 Plan
529 college savings plans offer tax-free growth and tax-free withdrawals for qualified education expenses. Ohio provides a state income tax deduction or credit for contributions. Make your 2025 contributions by December 31 to claim the deduction on your 2025 state return.
- Use Your Annual Gift Exclusion
You can give up to $19,000 per person ($38,000 for married couples splitting gifts) in 2025 without using any of your lifetime estate and gift tax exemption. Gifting before year-end can help reduce the size of your taxable estate and transfer wealth efficiently to family members.
- Consider a Roth Conversion
Converting a portion of your traditional IRA to a Roth IRA before year-end can make sense if your income is lower than usual or you expect higher tax rates in the future. The conversion amount is taxable now, but future qualified withdrawals are tax-free.
- Review Withholding and Estimated Tax Payments
Avoid an unpleasant surprise at tax time by checking your year-to-date withholding and estimated tax payments. If you’ve had a change in income, investments, or deductions, you may need to make an adjustment before year-end to avoid penalties or a large balance due.
- Harvest Capital Losses
If you have investments that have declined in value, you can sell them to offset realized capital gains and up to $3,000 of ordinary income. Be mindful of the “wash sale” rule, which disallows losses if you repurchase the same or substantially identical security within 30 days.
By April 15, 2026
If you miss the December 31st deadline for some items, a few opportunities remain open until the tax filing deadline:
- Contribute to an IRA
You can make a 2025 IRA contribution up until April 15, 2026. The limit is $7,000 (or $8,000 if age 50 or older). Contributions to a traditional IRA may be deductible, depending on your income and participation in an employer plan.
- Contribute to a Health Savings Account (HSA)
If you’re eligible for an HSA, you can make 2025 contributions up to April 15, 2026. If you did not maximize your 2025 contributions through payroll deductions, you can make a direct contribution to your HSA account. This can be a great last-minute way to reduce your taxable income. Be sure to note that the contribution applies to the 2025 tax year when making your payment.
- Contribute to an Ohio Scholarship Granting Organization (SGO)
Ohio taxpayers can receive a dollar-for-dollar state income tax credit (up to $750 per person, or $1,500 for joint filers) for donations to certified Scholarship Granting Organizations that provide private school tuition assistance to Ohio students. Contributions made by April 15, 2026, can be applied to your 2025 tax return.
Final Thoughts
A little year-end tax planning can go a long way toward minimizing your taxes and maximizing your financial opportunities. Every situation is unique, so it’s wise to review these strategies with your tax advisor before making major moves.
The opinions and views expressed by the author are personal and based on economic or market conditions at the time of publication. Actual economic or market events may turn out differently than anticipated. Nothing in this material is intended to serve as personalized investment, tax, or insurance advice.