The final months of the year are an ideal time to review your tax situation. Strategic year-end planning can help reduce your liability, improve your financial position, and start your new year on the right track.
There are several strategies to consider before December 31, including investment adjustments, retirement savings, and charitable contributions. Working with a financial advisor to align these strategies with your overall financial plan can help you avoid missed opportunities—and potentially lead to more impactful results.
Here are five strategies to consider:
1. Tax-Loss Harvesting
Tax-loss harvesting involves selling securities at a loss to offset capital gains tax owed on other investments—and, with this strategy you can potentially deduct up to $3,000 in losses against ordinary income.1
If you’ve realized or expect to realize capital gains this year, tax-loss harvesting can help reduce your tax liability by selling investments that have declined in value.
Tax-loss harvesting requires careful consideration. A financial advisor can help identify which losses are worth realizing and how to reinvest in a way that supports your long-term financial goals and keeps you compliant with tax regulations.
2. Maximize Retirement Plan Contributions
Another smart year-end strategy is increasing or maxing out your retirement plan contributions. Allocating more funds to your 401(k), 403(b), or IRA can enhance your retirement savings and reduce your taxable income.
The 2025 contribution limits are:2
- 401(k), 403(b): $23,000 (plus $7,500 catch-up if 50+)
- Traditional IRA: $7,000 (plus $1,000 catch-up if 50+)
Contributing to a Health Savings Plan (HSA) if you have an HSA-eligible plan also offers a triple tax benefit:3
- Contributions are tax-deductible
- Growth is tax-free
- Withdrawals for qualified expenses are tax-free
An advisor can help you evaluate your tax flow, identify the best accounts to prioritize, and determine whether pre-tax or Roth contributions will work best for your situation.
3. Strategic Charitable Giving
Giving back can offer meaningful tax benefits. Some options to consider before year end include:
- Donating appreciated stock instead of cash to avoid capital gains and still receive a full deduction
- Bunching donations into one year to exceed the standard deduction and itemize your giving
- Establishing a Donor-Advised Fund to make a large, tax-deductible contribution now, with the flexibility to choose which charities receive funds later
Your financial advisor can help integrate your philanthropic goals into your tax strategy to help ensure that your generosity can make the most possible impact—for the causes you support and your financial goals.
4. Use or Optimize FSA and HSA Accounts
If you have a Flexible Savings Account (FSA) through your employer, be sure to check the lose-it-or-use-it rules. Some FSAs allow a small rollover or grace period, but many require funds to be spent by year end.
Eligible expenses include healthcare products and services and over-the-counter medications.4
If you have an HSA, maxing out contributions before year end can be a beneficial way to boost tax-deferred savings for future healthcare costs.
An advisor can help coordinate how these accounts fit into your larger financial and tax picture—particularly if you’re considering retirement health benefits.
5. Review Withholding and Estimated Taxes
Before the year ends, it’s a good idea to evaluate your current withholding and potentially make an estimated tax payment before January 15, especially if you:
- Experienced a significant change in income
- Had solid investments
- Started a side business for freelance work
An advisor or tax professional can help project your year-end liability and recommend adjustments to help you avoid underpayment penalties or a large tax bill.
Make the Most Out of Year-End Opportunities
Many year-end strategies are time-sensitive and offer benefits that won’t carry over into the new year. Now is the time plan—whether your goal is to reduce taxes, increase savings, or give back to causes that matter to you.
The most effective strategies are aligned with your full financial picture, including investments, income, goals, and risk tolerance. Working with a qualified financial advisor can help ensure you’re not only minimizing taxes but also making decisions that support your long-term financial objectives.
- Kagan, J., “Tax-Loss Harvesting: Definition and Example,” Investopedia, March 7, 2025, https://www.investopedia.com/terms/t/taxgainlossharvesting.asp ↩︎
- “401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000,” Internal Revenue Service, November 2024, https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000 ↩︎
- “What is the HSA Tax Deduction?” National Tax Reports, February 2025, https://nationaltaxreports.com/what-is-the-hsa-tax-deduction ↩︎
- “Eligible Health Care FSA (HC FSA) Expenses),” FSA Feds, https://www.fsafeds.gov/explore/hcfsa/expenses ↩︎
Commentary provided in collaboration with Symmetry Partners, LLC. Symmetry Partners and Axis Wealth Partners are unaffiliated entities. Symmetry Partners is an investment advisory firm registered with the Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Investing in securities involves risks, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful. Content is provided for informational purposes only and is not advice. Neither Symmetry partners nor Axis Wealth Partners provides tax or legal advice. Discuss all strategies mentioned with a qualified professional prior to implementation.