You have limited time to put in place a working tax planning strategy before December 31st. The clock is ticking, but you still have chances to save thousands on your 2025 tax bill. Your financial planner in Fresno CA understands that married couples can claim an extra $12,000 if both spouses are at least 65 years old. This benefit starts to decrease when income reaches $150,000. The temporary SALT cap increase now allows deductions up to $40,000 for state and local taxes through 2029. Your deduction starts decreasing once income hits $500,000.
Smart retirement account contributions remain one of the best ways to reduce taxes. You can put up to $23,500 into 401(k)s and similar plans for 2025. People 50 or older can add another $7,500 as catch-up contributions. Charitable donations offer another great way to save, especially with new deduction limits coming in 2026.
Maximize Retirement and Tax-Deferred Contributions
Maxing out retirement contributions is still one of the best last-minute tax planning strategies. You can contribute up to $23,500 to your 401(k), 403(b), or similar workplace plan in 2025. If you’re 50 or older, you can add $7,500 more through catch-up contributions. People aged 60-63 qualify for “super catch-up” contributions that go up to $11,250.
Your year-end strategy should include IRAs too. The 2025 contribution limit is $7,000, with an extra $1,000 if you’re 50 and older. You have until April 15, 2026, to make your IRA contributions for the 2025 tax year.
Boost Deductions Through Charitable Giving
Tax planning through charitable giving becomes especially valuable as we approach year-end. Your taxable income could drop significantly in 2025 through strategic donations that support your favorite causes.
The “bunching” technique packs a powerful punch. You can consolidate multiple years of charitable contributions into a single tax year. This strategy helps you exceed the standard deduction threshold ($15,000 for single filers, $30,000 for married filing jointly). A three-year donation of $60,000 could save approximately $18,725 in taxes compared to $11,550 without bunching.
Use Investment Strategies to Lower Taxable Income
Smart investors can save on taxes through their investment portfolios as the year ends. Tax-loss harvesting is a great strategy that lets you sell underperforming investments to offset capital gains. You can also reduce your ordinary income by up to $3,000. The best part? You can carry forward any extra losses to future tax years without limits.
Here’s a simple example: Let’s say you have $20,000 in capital gains and $25,000 in losses. You could wipe out all your gains, reduce your ordinary income by $3,000, and carry the remaining $2,000 forward.
The wash-sale rule is something you need to watch out for. You can’t claim losses if you buy the same or very similar security 30 days before or after selling. There’s a way around this – you can keep your market position by buying different but related investments. You might swap an S&P 500 fund for a Russell 1000 fund.
Conclusion
We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to see how we can help you Retire ”Your Way!”
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Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser. This commentary reflects the personal opinions, viewpoints and analyses of the author, Dale Soutas. It does not necessarily reflect the views of Foundations Investment Advisors, LLC (“Foundations”) and is provided for educational purposes only and the contents are solely maintained by and the responsibility of the applicable 3rd party. The 3rd party content is subject to change at any time without notice, and does not represent an express or implied opinion or endorsement of any specific investment opportunity, investment strategy or planning strategy. Foundations in no way deems reliable any statistical data or information obtained from or prepared by third party sources in this commentary, nor does Foundations guarantee its accuracy or completeness. No legal or tax advice is provided or intended.
Tax loss harvesting is a strategy that may help minimize the amount of current taxes you have to pay on your investments by choosing to sell an investment at a loss. It is only appropriate for certain taxpayers in certain scenarios. Please review your retirement savings, tax and legacy planning strategies with your legal/tax advisor before attempting a tax loss harvesting strategy.
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