As 2025 winds down, conversations around taxes start to feel a little more urgent – and for good reason. Several key provisions from the One Big Beautiful Bill (OBBB) are now in full effect, including higher standard deductions and updated contribution limits. Those changes mean the steps you take before December 31 can meaningfully shape this year’s tax bill and set you up for a smoother 2026.

Not every tax change will affect every household – but taking a little time now to look over your finances could uncover a few smart moves you haven’t considered. Even small steps before year-end can make a meaningful difference.

Strengthen retirement savings and reduce taxable income

If you’re looking for a move that directly lowers this year’s taxable income, contributing to your retirement plan is one of the most effective ways to do it.

For 2025, you can contribute up to $23,500 to a 401(k) or similar workplace plan – and even more if you’re 50 or older and eligible for catch-up contributions. If you expect a year-end bonus, consider putting a portion toward your retirement plan. It boosts long-term savings and helps lower your tax bill today.

Even small increases to your contribution rate in the final pay periods of the year can make a measurable difference.

Decide whether to itemize or take the standard deduction

With the standard deduction now $15,750 for single filers and $31,500 for couples, many households will find itemizing less beneficial than before.

Now is the time to run the numbers:

• Add up mortgage interest, charitable gifts, medical expenses, and state and local taxes
• Compare your total to the standard deduction
• Decide which path offers the better outcome

Even if you ultimately take the standard deduction, many strategies above – retirement contributions, tax-loss harvesting, and gifting – still reduce your taxable income or future tax exposure.

Revisit your charitable giving strategy

Charitable giving is still a smart way to wrap up the year, but with the higher standard deduction fewer people are itemizing. That doesn’t mean giving isn’t worthwhile, but it might change how you go about it.

If you’re planning a larger gift, or if you regularly donate smaller amounts throughout the year, “bunching” donations into a single tax year may help you exceed the standard deduction threshold and unlock the tax benefit of itemizing.

If you already know you’ll take the standard deduction this year, consider timing future contributions or using donor-advised funds to keep your giving tax-efficient.

Check your withholding and estimated payments

Year-end is the ideal time to confirm you’re on track to meet IRS withholding requirements. If you’ve had a change in income – a raise, bonus, freelance work, or investment income – you may need to adjust now to avoid an unexpected tax bill in April.

Increasing withholding on a December paycheck or making an estimated tax payment before December 31 can help you avoid penalties and smooth out cash flow for next year.

This is especially important for taxpayers with variable income, entrepreneurs, or those navigating multiple income streams.

Pulling it all together

Tax planning doesn’t have to be complicated. Most households benefit from focusing on three goals:

1. Lower taxable income where possible.
2. Avoid surprises and penalties.
3. Use year-end timing to your advantage.

Whether you make one move or several, even small adjustments in December can add up to meaningful savings next year – and help you start 2026 feeling organized and confident.

Need a place to begin? Spend 10 minutes reviewing your income, withholdings, and charitable contributions. Identifying just one opportunity before December 31 can help you keep more of the money you’ve earned.