Year-End Tax Planning Checklist
Your complete year-end tax planning checklist: deduction acceleration, Roth conversion strategies, retirement contribution deadlines, and last-minute moves to reduce your tax bill.
December 31 is the most important deadline in tax planning—more important than April 15. Why? By the time you file your return, your tax liability is already set in stone. But before year-end, you still have time to pull levers: accelerate deductions, defer income, fund retirement accounts, harvest losses, and make strategic moves that can save thousands. This checklist covers the big moves and the easy wins, whether you're an individual, business owner, or investor.
Income Strategies
Income timing is one of the most powerful year-end tools—especially for business owners.
| Strategy | When to Use | Who Benefits |
|---|---|---|
| Defer Income to Next Year | Higher income this year, lower expected next year | Business owners, freelancers |
| Accelerate Income | Expect higher rates or income next year | Anyone with flexible timing |
| Roth Conversion | Low-income year or expect higher future rates | Retirees, sabbaticals, career changes |
| Harvest Capital Gains | In the 0% capital gains bracket | Lower-income years |
Use our Tax Planner to model how income timing affects your total tax bill across multiple years.
Deduction Strategies
The goal: bunch deductions into the year where they provide the most benefit.
Accelerate Into This Year:
- Prepay January mortgage (extra interest)
- Prepay state/local taxes (within SALT cap)
- Bunch charitable donations
- Prepay business expenses (rent, insurance)
- Purchase equipment before Dec 31 (Section 179)
Defer to Next Year (if beneficial):
- Delay invoicing until January
- Hold off on asset sales with gains
- Postpone Roth conversions if income is high
- Push bonuses to next year (if your employer allows)
Bunching works especially well for charitable donations—donate two years' worth in one year to exceed the standard deduction, then take the standard deduction next year.
Retirement Account Moves
Retirement contributions are the most accessible tax savings tool for most people.
| Account | 2025 Limit | Deadline |
|---|---|---|
| 401(k) / 403(b) | $23,500 ($31,000 if 50+) | December 31 |
| Traditional / Roth IRA | $7,000 ($8,000 if 50+) | April 15, 2026 |
| SEP-IRA | $69,000 or 25% comp | Tax filing deadline (with extension) |
| Solo 401(k) (employee) | $23,500 ($31,000 if 50+) | December 31 |
| Solo 401(k) (employer) | Up to $69,000 total | Tax filing deadline |
| HSA | $4,300 / $8,550 family | April 15, 2026 |
Key Moves:
- Max out 401(k) by December 31 (adjust payroll NOW if you're behind)
- Consider Roth conversion if in a low bracket this year (deadline: Dec 31)
- Fund HSA to the max—triple tax benefit (deduction, tax-free growth, tax-free withdrawal for medical)
- Business owners: establish Solo 401(k) by Dec 31 to make employee contributions for this year
Investment Tax Moves
Year-end is prime time for portfolio tax optimization.
- Tax-Loss Harvesting — Sell investments at a loss to offset gains. Net losses up to $3,000 offset ordinary income. Excess carries forward indefinitely. Watch the 30-day wash sale rule.
- Gain Harvesting — If you're in the 0% long-term capital gains bracket (taxable income under ~$47,025 single / $94,050 married), sell appreciated assets tax-free.
- Donate Appreciated Stock — Give appreciated securities directly to charity. You deduct the full market value and pay zero capital gains tax. Better than donating cash.
- Qualified Charitable Distributions — Age 70.5+? Donate up to $105,000 directly from your IRA to charity. Satisfies your RMD and is excluded from income entirely.
Real Estate Considerations
- Cost Segregation Study — Accelerate depreciation on properties placed in service this year. Most valuable for properties over $500K.
- 1031 Exchange Planning — Selling a property? Plan the exchange timeline to close before or after Dec 31 strategically.
- Repair vs. Improvement Timing — Repairs are fully deductible in the current year. If you're planning property work, consider timing for maximum deduction.
- Real Estate Professional Status — If you're close to the 750-hour threshold, document your hours carefully before year-end.
Business Owner Checklist
Business owners have the most year-end levers to pull:
- ✓ Review entity structure—should you elect S-Corp for next year?
- ✓ Purchase equipment before Dec 31 (Section 179 / bonus depreciation)
- ✓ Prepay expenses: January rent, Q1 insurance, subscriptions
- ✓ Pay employee bonuses before Dec 31 to deduct this year
- ✓ Issue and collect outstanding invoices—or defer them strategically
- ✓ Fund retirement plan (Solo 401(k) must be established by Dec 31)
- ✓ Review contractor payments—issue 1099s in January for anyone paid $600+
- ✓ Consider an accountable plan for employee expense reimbursements
Pro Tips
Start in October, Not December
The best year-end moves require time to execute. Equipment purchases, Roth conversions, and charitable gift strategies all need planning. Don't wait until the last week of December.
Model Before You Act
Every strategy has tradeoffs. A Roth conversion saves future taxes but increases current-year income. Tax-loss harvesting resets your cost basis. We model every scenario before recommending action.
Think Multi-Year
The best year-end strategy considers not just this year but next year and beyond. Shifting income between years works best when you look at the full picture, not a single year in isolation.
Frequently Asked Questions
Need Help With Your Taxes?
Our DFW CPAs specialize in helping individuals and businesses minimize their tax burden. Schedule a free consultation to discuss your specific situation.