Year-End Tax Planning Opportunities for 2025: What to Do Before December 31

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As 2025 winds down, it’s the perfect time to review your financial picture and take advantage of year-end tax strategies before the calendar flips. The coming changes under the Opportunity for Better Budgeting and Better America Act (OBBBA) will shift how certain deductions and credits work starting in 2026, so planning now could save you thousands.

Here’s a breakdown of the biggest year-end tax moves to consider before December 31, 2025.

1. High-Income Taxpayers Making Charitable Contributions

If you regularly give to charity, 2025 is the year to be strategic.

By lumping charitable donations into this year, you can avoid the new 0.5% of AGI floor coming in 2026.

Example: If you typically give $5,000 a year, consider donating $10,000 in 2025 and skipping next year. You’ll get a bigger deduction now and sidestep the new limits.

2. Taxpayers on the Brink of Itemizing

If you’re close to the standard deduction threshold, there’s a smart play here.

Bundle your non-charitable itemized deductions (like property taxes, mortgage interest, and medical expenses) into 2025.

That way, you can take advantage of the non-itemizer charitable contribution rule that begins in 2026, giving you flexibility to claim additional charitable deductions next year even if you don’t itemize.

3. Employees with Incentive Stock Options (ISOs)

If you have ISOs, pay attention.

The Alternative Minimum Tax (AMT) “bump zone” will be lower in 2026, meaning more of your income could be taxed at higher AMT rates.

Strategy: Exercise your ISOs in 2025 to avoid the tighter AMT thresholds coming next year.

It’s worth running a simulation with your CPA before pulling the trigger.

4. Families with 529 Plans

Good news for parents and professionals, the OBBBA expanded what counts as qualified 529 plan expenses.

That means if you paid for K–12 education or professional credentialing in 2025, you can reimburse yourself tax-free from your 529 plan this year.

Don’t leave that money sitting when it could come back to you.

5. Taxpayers Making or Considering Roth Conversions

Roth conversions are one of the most powerful long-term tax moves, but timing matters.

Before converting, analyze how the conversion might affect your ability to claim new deductions or credits in 2026.

If a conversion pushes you into a higher bracket or phases you out of benefits, it might make sense to convert in stages or wait until next year.

6. Small Business Owners and Professionals (SSTBs)

If you own a Specified Service Trade or Business think law, consulting, financial services, medicine; the Qualified Business Income (QBI) deduction phaseouts are shifting.

If you’re above the 2025 phaseout range, you might want to defer income into 2026 when the limits expand.

Conversely, if you’re below the phaseout this year but expect higher income next year, accelerate income into 2025 to capture a bigger deduction.

These are nuanced moves; talk with your accountant before finalizing.

7. Homeowners Making Energy-Efficient Upgrades

Want to make your home greener and save on taxes?

Complete energy-efficient property improvements — like installing new doors, windows, or completing a home energy audit — before December 31, 2025.

You could qualify for valuable tax credits and rebates, especially if you meet energy efficiency thresholds.

The Bottom Line

The final months of 2025 are packed with opportunities to save money, but most of them disappear when the clock strikes midnight on December 31.

Whether it’s charitable giving, Roth conversions, or business income timing, these proactive steps can make a huge difference when you file next spring.

My advice: Sit down with your financial planner or CPA before Thanksgiving to lock in your strategy. A few smart moves now can mean thousands in savings later.

Take Action

If you want a simple way to stay on top of smart financial moves all year long, join The Money Dad Newsletter, where I share seasonal checklists, real-world strategies, and tools to help families make smarter money decisions every month.

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