10 Smart Year-End Financial Moves to Close Out 2025 Strong

December 15, 2025

As the year winds down, it’s easy to focus on holiday plans—but your financial checklist deserves attention, too. Year-end isn’t just a date on the calendar; it’s a key deadline for actions that can reduce your taxes, boost retirement savings, and set the stage for a stronger 2026. Missing these deadlines could mean lost tax advantages or penalties.

Here’s a practical guide to 10 important steps to consider before December 31.

1. Maximize retirement plan contributions

For workplace retirement accounts like 401(k)s and 403(b)s, December 31 is the final day to contribute for 2025. The standard contribution limit is $23,500, with catch-up options of $7,500 for those 50+, and up to $11,250 for certain individuals aged 60–63 if your plan allows.

IRAs and health savings accounts (HSAs) offer a bit more flexibility, with contributions allowed until April 15, 2026. But contributing before year-end can lower your taxable income sooner. If you receive a year-end bonus, consider directing part of it into your retirement account.

HSA Tip: Contributions through payroll can save FICA taxes, unlike direct contributions. To capture this benefit for 2025, make sure payroll deductions occur before year-end.

2. Take required minimum distributions (RMDs)

If you’re 73 or older, you must withdraw your RMD from traditional IRAs and most workplace accounts by December 31 to avoid penalties of up to 25%.

Charitable giving via a qualified charitable distribution (QCD) can satisfy your RMD while reducing taxable income, and supports organizations you care about. Non-spouse inherited IRA beneficiaries may also need to withdraw by year-end, depending on the account’s rules and the original owner’s age at death.

3. Evaluate a Roth conversion

Converting funds from a traditional IRA to a Roth IRA by December 31 means the converted amount counts toward 2025 taxable income. While you’ll pay taxes now, future qualified withdrawals are tax-free and Roth IRAs aren’t subject to RMDs.

If your investments have declined, a year-end conversion could result in a lower tax bill while helping diversify your retirement tax strategy.

4. Harvest investment losses

Selling investments that have declined in value and replacing them with similar assets can offset gains and up to $3,000 of ordinary income. Unused losses carry forward indefinitely.

Be mindful of wash-sale rules, which prevent repurchasing the same or substantially identical security within 30 days. Cryptocurrencies currently have different rules, but regulations may change.

5. Make charitable contributions

To count for 2025, donations must be completed by December 31. Strategies like bunching donations or using a donor-advised fund can maximize deductions. Donating appreciated assets, such as long-term stocks, may also reduce capital gains taxes.

Even if you don’t itemize, combining several years’ donations into one year could make itemizing worthwhile. Recent changes in charitable giving rules may make it beneficial to accelerate some donations.

6. Use remaining flexible spending account (FSA) funds

Most FSAs follow a “use-it-or-lose-it” rule. Spend any leftover funds before year-end unless your plan allows a rollover or grace period. Check your employer’s rules carefully.

7. Contribute to education savings

Contributions to 529 plans by December 31 can qualify for state tax benefits. Prepaying tuition for early 2026 can also maximize federal education credits.

You can front-load up to five years’ worth of the annual gift tax exclusion—$95,000 per individual or $190,000 if split with a spouse—without triggering a gift tax, as long as IRS Form 709 is filed.

8. Make strategic gifts

Gifting up to $19,000 per recipient in 2025 is tax-free, or $38,000 for married couples splitting gifts. This can reduce estate value and help family members with education, housing, or other financial needs.

9. Accelerate deductible expenses

If you’re near the medical expense threshold of 7.5% of AGI, paying for treatments or prescriptions before year-end could help you itemize. Other deductible expenses, like mortgage interest or property taxes, can sometimes be accelerated if you plan to itemize. Verify that any payments made for 2026 purposes are applied correctly to 2025.

10. Consider deferring income

Freelancers or self-employed individuals may reduce 2025 taxable income by delaying billing until January. This strategy could keep you in a lower tax bracket, but it’s important to confirm it works with your overall tax plan.

Looking Ahead

Even if you miss a deadline, there may be opportunities next year. Acting now, however, can maximize savings and reduce stress. Tax laws are complex and subject to change, so working with a financial or tax professional is recommended to tailor strategies to your personal situation.

Sources:

https://www.fidelity.com/learning-center/personal-finance/year-end-money-checklist

Disclosure:

This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.

This material is provided as a courtesy and for educational purposes only.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.