Your Year-End Federal Tax Planning Checklist
Most tax-saving moves expire on December 31. Work through this checklist in the final weeks of the year and you can shave hundreds — sometimes thousands — off your federal bill, or prevent a surprise balance due in April.
Updated for Tax Year 2025 · 9 min read
Year-end planning rewards action over knowledge: nearly every item below involves a deadline, and every deadline lands before the new year. Start at the top — the projection in step one tells you which of the remaining steps matter most for your situation.
Run a Tax Projection Before Anything Else
You cannot plan what you have not measured. Estimate your full-year income, deductions, and credits now — while there is still time to act on the result. A projection tells you which bracket you land in, whether you are heading for a surprise balance due, and where extra effort will pay off. Our calculator walks through the entire calculation using 2025 rules.
Fix Your Withholding or Estimated Payments
If your projection shows a balance due, you generally avoid underpayment penalties by paying at least 90% of this year's tax or 100% of last year's tax (110% if last year's AGI was over $150,000) through withholding and timely estimated payments. Employees can submit a revised W-4 and ask for an extra dollar amount per pay period; the self-employed can make a January estimated payment. Do this by early December so remaining paychecks can still catch up.
Max Out Retirement Contributions
For 2025, you can contribute up to $23,500 to a 401(k) or similar workplace plan, plus a $7,500 catch-up at age 50+ — and an enhanced $11,250 catch-up if you are age 60–63. IRA contributions for 2025 are $7,000 ($8,000 with the age-50+ catch-up), and you have until the April filing deadline to fund those. Traditional contributions reduce this year's taxable income; Roth contributions do not, but grow tax-free.
Use It or Lose It: HSA and FSA Deadlines
The 2025 Health Savings Account limits are $4,300 for self-only coverage and $8,550 for family coverage (plus $1,000 if you are 55+). HSA contributions made by the April deadline can still count for 2025. Flexible Spending Accounts are stricter: most plans are use-it-or-lose-it, and elections for the year must generally be in place by December 31 — check whether your employer offers a grace period or carryover.
Take Your RMD — and Consider a QCD
If you are 73 or older, required minimum distributions from traditional IRAs and most workplace retirement plans must be taken by December 31 to avoid a 25% excise tax on the shortfall. If you are 70½ or older and charitably inclined, a qualified charitable distribution (QCD) — up to $108,000 per person for 2025 — moves IRA money directly to charity, counts toward your RMD, and never appears in your taxable income.
Harvest Investment Losses (and Mind December Distributions)
Selling investments that are below their basis realizes losses that offset realized gains, plus up to $3,000 of ordinary income — with the excess carrying forward. Be aware of the wash-sale rule: repurchasing the same or a substantially identical security within 30 days disallows the loss. Also watch for mutual fund capital gains distributions, typically paid in December: they are taxable to you even if you reinvest them.
Bunch Deductions Where It Makes Sense
If your itemized deductions hover near the standard deduction amount, bunching — concentrating two years of charitable gifts, elective medical procedures, or state tax prepayments into one year — can let you itemize in that year and take the standard deduction the next. Retirees 65+ should also check whether the new senior deduction (up to $6,000 per qualifying person for 2025–2028, phasing out above $75,000/$150,000 of income) changes their math.
Time Education, Energy, and Big-Ticket Credits
Some credits depend on when you pay or place items in service. If you are near a credit's income limit, deferring a January bonus or accelerating a deductible expense can change eligibility. Confirm which home-energy and education provisions still apply to the tax year in question before scheduling the expense.
Organize Records Before Filing Season
Request missing W-2s and 1099s, reconcile charitable receipts, and download year-end brokerage statements in December. Filers who know their numbers file earlier, get refunds sooner, and are far less likely to amend.
Start With Your Projection
Run the numbers once, then act on what they tell you.
Try the Federal Tax Calculator
Project your 2025 refund or balance due in minutes.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional for guidance specific to your situation.