The Countdown Is On: Ten Smart Tax Moves to Make Before the End of 2025

Let’s be honest: the last thing you probably want to think about this time of year is tax planning. But before you wrap that last gift or close the books on 2025, a few calculated moves this month will not only set you up for a stronger 2026 but keep more money in your pocket.

This year, the One Big Beautiful Bill Act (OBBBA) changed the game for high earners and business owners. From a permanent 20% pass-through deduction to expanded expensing rules and higher estate tax thresholds, there are big opportunities hiding in the fine print that can make a big difference in your bottom line.

Here are some last minute to-do’s to put on your list (check it twice!) before ringing in the new year:

1. Review Your Business Structure (And Your Pay Mix)

If you own an S-Corp, a partnership, or an LLC, OBBBA’s permanent 20% pass-through deduction could make a meaningful dent in your tax bill. Before year end, work with your CPA to run projections and discuss these two vital questions:

• Should you adjust your W-2 vs. K-1 ratio?
• Would electing S-Corp status (or changing it) create a better long-term tax profile?

A quick structure review now could mean smoother sailing — and fewer surprises — at filing time next year.

2. Max Out (And Maybe Stack) Your Retirement Contributions

The 2025 limits are up: $23,500 for 401(k) deferrals, and $31,000 if you’re over 50. Contributing to the maximum to a 401(k) or IRA will reduce your 2025 tax bill. If you’ve already hit the max and have extra cash flow, you could qualify for a cash balance or defined benefit plan to defer more income in a tax-advantaged way.

And here’s a pro tip: start making your 2026 contributions early and front load them if you can. This gives them extra time to compound throughout the year— a quiet but powerful advantage.

 3. Accelerate The Right Expenses

Classic move, still effective: if your tax rate will hold steady next year, prepay your deductible expenses before December 31. That might mean:

•  Ordering next year’s supplies now
• Paying for 2026 professional development in advance
• Finalizing that equipment purchase (just make sure it’s “placed in service” before year end).

That list tip comes with a caveat: skip the temptation to buy things just to reduce taxes. If a purchase doesn’t help your business grow, it’s not a win.

 4. Take Advantage Of 100% Equipment Expensing

Under OBBBA, qualified equipment purchases, from vehicles to automation systems, can be fully expensed in the year you place them in service.

If that new excavator, server, or CNC machine will help you scale or modernize operations, now’s the time. Purchasing and placing this equipment in service by December 31 means the entire cost of the equipment can be deducted in 2025. But it’s very important to remember: “placed in service” means ready and available for use, not sitting in a warehouse.

5. Use The Pass-Through Entity (PTE) Tax Workaround

If your state allows, paying state income tax at the entity level (instead of individually) can unlock a federal deduction on income that would otherwise be nondeductible.

But these payments usually must be made by December 31, so talk with your CPA soon.

6. Rethink Charitable Giving

Generosity is great – and this year, it’s strategic. The OBBBA contains several changes to charitable deduction benefits starting in 2026, including a floor on itemized contributions and an overall cap to itemized deductions, so accelerating gifts in 2025 could yield a bigger deduction.

Consider these options:

• Donor-Advised Funds (DAFs): Get the deduction now, direct your giving over time.
• Qualified Charitable Distributions (QCDs): Donate up to $108,000 directly from an IRA if you’re 70½+

It’s the rare tax move that actually feels good and does good.

For a brief breakdown of how to take advantage of today’s more flexible deduction rules, we’ve created a guide with strategies and tools to make your charitable dollars go further.

7. Plan For The SECURE Act 2.0 Tweaks

A few delayed provisions for retirement investments will kick in soon. If you’re over 50, 2025 is your last year to make pre-tax catch-up contributions. Starting in 2026, they must be Roth.

And if you’re 60–63, don’t miss the new “super catch-up” for 2025 of up to $11,250 extra for your 401(k).

8. Explore A Roth Conversion

If your income dips this year — or if you expect higher rates later — a Roth IRA conversion could make sense. You’ll pay taxes on the converted amount now but enjoy tax-free growth and withdrawals down the road. This strategy works especially well for business owners in transition years (like after a sale or during a slow cycle).

9. Harvest Gains (And Losses) Strategically

Even in a strong market, reviewing your portfolio for tax-loss harvesting opportunities can help offset gains or reduce ordinary income (up to $3,000).

Coordinate with your financial advisor to avoid wash-sale issues and make sure the timing lines up with your 2025 goals.

10. Look Ahead — Not Just To April 15

Tax planning isn’t just about 2025 or 2026. With new phase-outs, charitable caps, and contribution shifts coming, now’s the moment to model multiple years at once. Ask your CPA:

• How will OBBBA’s provisions affect my future tax profile, beyond 2026?
• Should I accelerate or defer income in anticipation of changes?
• Where can I lock in today’s benefits before they tighten?

Bottom Line

Smart tax planning doesn’t have to mean spreadsheets and stress. Think of it as a financial reset — a way to align your cash flow, investments, and goals before the calendar flips.

And if you’re not sure where to start? Grab a coffee, a cookie, call your CPA, and take a bite-sized break to talk strategy. Future you will be very happy when April rolls around.