Maximize Retirement Contributions

One of the most beneficial moves you can make is maximizing your retirement contributions. For 2025, you can contribute up to $23,500 to your 401(k), with an additional $7,500 catch-up contribution if you are over 50. Meanwhile, traditional and Roth IRAs have limits of $7,000, plus a $1,000 catch-up for those over 50. By taking advantage of these opportunities, you not only reduce your taxable income but also build future wealth.

Strategize Charitable Giving

Charitable giving around year-end doesn't just help causes you care about—it can also optimize your tax strategy. Consider strategies such as donation bunching or utilizing a donor-advised fund. For those over age 70½, using a Qualified Charitable Distribution (QCD) from an IRA can fulfill your required minimum distribution once you turn 73, thus providing additional tax advantages.

Explore Roth IRA Conversions

Roth conversions involve moving funds from a traditional IRA to a Roth IRA, which can be advantageous in a lower tax bracket year. However, this move isn't suitable for everyone and should be considered annually based on individual circumstances—consulting with a financial professional is always a wise choice.

Fund Your HSA

Health Savings Accounts (HSAs) offer significant tax benefits. For 2025, you can contribute up to $4,300 as an individual or $8,550 as a family. HSAs are powerful tools for both short-term healthcare expenses and long-term retirement planning due to their triple tax benefits: tax-deductible contributions, tax-free withdrawals for medical expenses, and tax-free growth.

Taking just a little time now can make a big difference in financial outcomes for the year ahead. Not all strategies are suitable for everyone, so it's essential to consult with a financial professional or a certified public accountant (CPA). Evaluate your options or consider scheduling a financial check-in to ensure you’re on the right track.