What Tax Moves Should I Make Before Year-End?

Although April often gets the most attention for tax filing, the final months of the year are crucial for high-income and high-net-worth individuals to take proactive steps in managing tax liability before December 31st.

Effective year-end tax planning can help reduce your taxable income, maximize deductions, and ensure your strategies align with your long-term financial goals.

4 End-of-Year Tax Considerations

Here are four key tax tips tailored specifically for high-income professionals, like executives, physicians, business owners, and dentists, along with examples to help you maximize your tax savings and financial well-being.

1. Maximize Retirement Plan Contributions

One of the most effective ways to reduce taxable income is by maximizing contributions to retirement accounts.

The contribution limit for 401(k) plans in 2025 is $23,500, plus an additional $7,500 catch-up contribution for those age 50 and older. [Source: IRS]

For example:

Alexis Moore, a 45-year-old CMO, realized in October that she had never adjusted her 401(k) deferral percentage as her income increased, and she had only contributed $15,000 so far this year. With two months remaining, she was able to increase her contributions to reach the $23,500 limit.

This adjustment not only boosts her retirement savings but also lowers her taxable income by an additional $8,500, decreasing her income tax liability and resulting in significant tax savings.

2. Consider Donating Appreciated Investments

If you manage after-tax investment portfolios with substantial unrealized gains, donating appreciated securities instead of cash can offer a double advantage:

• Avoid capital gains tax on the appreciation.
• Claim a charitable deduction for the full fair market value.

To illustrate:

Dr. Michael Rodriguez, an orthopedic surgeon based in Cincinnati, received a call from his financial planner in November to review his investment portfolio. Due to strong market gains this year, his $10,000 investment in a tech company has now increased to $22,000.

When he found out that selling the stock would generate over $12,000 in realized capital gains (which would be taxed at a 23.8% federal rate), he chose to replace his year-end charitable cash donations with a gift of the appreciated stock.

As a result, Michael will save nearly $3,000 in capital gains taxes and will receive a deduction for the full value of the shares ($22,000 x 37% = $8,000). Additionally, he is able to meet his charitable goals using an investment that costs him only $10,000, rather than $22,000 in cash.

3. Accelerate Deductible Expenses

Shifting deductible expenses into the current year can be advantageous if you anticipate being in a higher tax bracket this year compared to the next.

To give you an idea:

Dana Blackwell, a business owner, expects lower income next year due to changes in the industry. After meeting with her CPA and financial planner, she decides to:

• Prepays professional liability insurance
• Purchases the new equipment she had planned for January
• Pays registration for a 2025 industry conference

By accelerating deductible expenses into the current year, Dana reduces her taxable income in the higher-income year, thereby maximizing tax efficiency.

4. Contribute to a Health Savings Account (HSA)

For those with high-deductible health plans, maximizing HSA contributions offers triple tax advantages:

• Tax-deductible contributions
• Tax-free growth
• Tax-free withdrawals for qualified medical expenses

For 2025, the contribution limit is $8,550 for families and $4,300 for individuals, with an additional $1,000 catch-up contribution for those 55 and older. [Source: IRS]

For instance:

James Osmer, a 50-year-old IT executive with family coverage, had contributed only $5,000 to his HSA. By maxing out his contribution before year-end, he reduces his taxable income and sets aside tax-free dollars for future healthcare expenses.

Watch this video for more information on end-of-year tax planning tips for wealthy families.

Putting End-of-Year Tax Strategies into Action

While these year-end tax strategies can be powerful tools for high-income professionals, every situation is unique. Here are some important considerations:

1. Consult Your Advisors: Tax laws are complex and constantly evolving. Always review decisions with a qualified CPA and your financial planner.

2. Keep Accurate Records: Document all contributions, deductions, and charitable gifts for smooth tax filing and potential audits.

3. Plan Ahead: Although year-end actions matter, the most effective tax planning happens throughout the year. Consider setting up a quarterly financial review to stay on top of your tax situation.

4. Align with Your Goals: Don’t let tax savings overshadow your broader financial objectives, such as retirement, business growth, or estate planning. Often, it's helpful to consider your "lifetime tax liability" in addition to your current year's tax bill.

5. Stay Current: Contribution limits and tax laws can change annually. Review them regularly with your advisor.

Frequently Asked Questions About Year-End Tax Planning Strategies

What are the 401(k) contribution limits for 2025?

For 2025, the limit is $23,500. The standard catch-up remains $7,500, but for those ages 60–63, a “super catch-up” of $11,250 may apply (if your employer’s plan allows).

How does donating appreciated stock reduce taxes?

Donating appreciated securities directly to a qualified charity allows you to:

• Avoid paying capital gains tax on the increase in value
• Receive a deduction for the full fair market value of the donated shares

Can accelerating expenses lower my tax bill?

Yes. For 2025, shifting deductible business or professional expenses (insurance, equipment, dues, etc.) into the current year can lower taxable income in a higher-income year. Timing matters, so coordinate with your CPA.

What are the HSA contribution limits for 2025?

For 2025, $4,300 for self-only coverage; $8,550 for family coverage; plus the same $1,000 catch-up for those 55 and older.

Have You Thought About End-of-Year Tax Planning?

By acting before December 31st, you can potentially save thousands in taxes while strengthening your overall financial position.

At Spaugh Dameron Tenny, we work with high-income professionals, business owners, and retirees to help integrate tax planning into a broader financial strategy. In collaboration with your CPA, our financial planners can help you determine which year-end tax moves best fit your goals.

Reach out to us today to get started.

Names and locations have been changed in this article to protect the identity of those involved.

Any discussion of taxes is for general information purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax, or accounting advice. Clients should confer with their qualified legal, tax, and accounting advisors as appropriate.

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