Quick Overview: Make the Most of the 2025 Tax Season
As the year wraps up, there’s still time to make smart financial moves. The right end-of-year tax decisions can help you keep more of your hard-earned money and set up a better start to 2026.
- Plan ahead before December 31 — not after.
- Review deductions and credits that often get missed.
- Make contributions and payments that reduce taxable income.
- Get professional help to avoid mistakes and maximize savings.
These simple actions can add hundreds—or even thousands—to your refund.
The end of the year is the perfect time to take control of your taxes. Waiting until April to think about deductions and credits often means leaving money on the table. By acting before December 31, you can make decisions that directly increase your refund or reduce what you owe. This is also the time to check your records, finalize contributions, and plan smartly for next year’s tax season. Whether you’re a Chicagoland family, self-employed professional, or small-business owner, these easy end-of-year tax tips can make a big difference when you file.
1. Review Your Withholding Early
Don’t wait until tax season to discover you paid too little or too much. Review your W-4 and make sure the right amount is being withheld. If you had major life or income changes this year—such as a raise, marriage, or new freelance income—adjusting your withholding now can prevent surprises later. The IRS provides a Tax Withholding Estimator that helps you calculate the right balance. Making this change before year-end can help you avoid both underpayment penalties and overpayment, which means more money stays in your pocket throughout the year.
You can also speak with a professional through our financial coaching program to help align your withholding with your savings goals.
2. Max Out Your Retirement Contributions
Contributing to a retirement account is one of the easiest ways to reduce taxable income. Before December 31, check how close you are to your annual contribution limit for your 401(k) or IRA. For 2025, contribution limits have increased, offering even greater savings potential. Small-business owners can also use SEP-IRAs or Solo 401(k)s, which allow higher contribution amounts. These contributions don’t just reduce your taxable income—they also help you build long-term financial security and take advantage of compound growth.
3. Check Your Flexible Spending Account (FSA) Balances
If you have a health or dependent-care FSA, don’t lose your unused funds. Many plans follow a strict “use it or lose it” policy, meaning you forfeit any remaining balance at the end of the year. Schedule last-minute doctor visits, buy prescription glasses, or stock up on eligible medical supplies before December 31. Some employers allow small rollovers or short grace periods, but it’s best not to risk it. Planning these expenses in December ensures you fully use your benefits and avoid giving unused funds back to your employer.
If you’re unsure what counts as an eligible expense, our tax preparation services can help you review your receipts and avoid mistakes when filing.
4. Make Last-Minute Charitable Donations
Giving back can also give you a tax break. Donations to qualified nonprofits, churches, or local organizations are deductible if you itemize your taxes. Be sure to obtain written acknowledgments for donations over $250 and keep receipts for smaller gifts. Even non-cash contributions, like clothing or household items, can count if given to approved charities. Check the IRS Charitable Contributions Guide to ensure your donation qualifies. Aside from the financial benefit, charitable giving is a meaningful way to make a difference in your community while improving your tax outcome.
Review our guide on common tax mistakes to make sure your charitable deductions are correctly documented.
5. Pay Deductible Expenses Before Year-End
If you plan to itemize, pay deductible expenses before December 31. These include property taxes, mortgage interest, and certain medical or educational costs. Business owners can also prepay rent, insurance, or vendor fees to move deductions into the current year. Paying early can lower your total taxable income and help you plan your cash flow better for the coming months. Timing is crucial—make sure checks clear or digital payments process before midnight on New Year’s Eve so they count for this tax year.
6. Gather Receipts for Business or Side-Gig Income
Freelancers and small-business owners should stay organized year-round. Collect receipts, invoices, and mileage logs now rather than waiting until tax time. Many everyday business costs are deductible—office supplies, marketing, equipment, even a portion of your home if you have a dedicated workspace. Partnering with an accountant such as Del Real Tax ensures your small-business accounting captures every available deduction. Staying proactive keeps you compliant and reduces stress when filing season arrives.
7. Sell Losing Investments to Offset Gains
Tax-loss harvesting is a powerful strategy for investors. If you’ve sold investments for a profit this year, you can offset those gains by selling underperforming stocks or funds before year-end. The losses can reduce your taxable income, lowering your tax bill. However, be aware of the “wash-sale rule,” which disallows claiming a loss if you buy back a substantially identical investment within 30 days. Consulting a professional before making these moves ensures you stay within IRS guidelines while optimizing your portfolio’s tax efficiency.
8. Take Advantage of Education Credits
Education tax credits can make a big difference for families and students. The American Opportunity Credit and the Lifetime Learning Credit can offset the cost of tuition, books, and other eligible expenses. Review your Form 1098-T and plan tuition payments strategically—sometimes paying before December 31 yields an additional credit for the current year. Parents with college students should also review scholarship and grant records to maximize their benefits. These credits reduce your tax liability dollar-for-dollar, making them one of the most valuable education incentives available.
9. Boost Your Energy-Efficiency Upgrades
Energy-efficient home improvements can qualify for valuable federal tax credits. The Energy Efficient Home Improvement Credit covers upgrades like new windows, insulation, HVAC systems, and solar panels. To claim the credit, keep copies of receipts and manufacturer certification statements from contractors. Beyond the immediate tax savings, these upgrades can lower your long-term utility bills and increase your home’s value. With expanded federal incentives in place, 2025 is a great year to invest in energy efficiency.
10. Schedule a Year-End Tax Review
The smartest tax move you can make is getting professional advice before it’s too late. A December meeting with your accountant can uncover deductions, timing opportunities, or missed credits you can still act on before year-end. At Del Real Tax, we help Chicagoland families and small businesses create personalized tax strategies that fit their unique financial goals. A year-end review also helps you plan proactively for next year so you enter 2026 financially prepared and confident.
End-of-Year Tax Planning Pays Off
A few hours of preparation now can lead to a bigger refund later. By reviewing deductions, contributions, and credits before December 31, you can maximize your tax savings and minimize stress during filing season. Staying organized and taking action early also helps avoid mistakes that could delay your refund. The end of the year is your last chance to take control of your financial picture—and the payoff can be significant.
If you want personalized, local guidance, Del Real Tax in Lyons, IL is ready to help. We specialize in tax planning, accounting, and advisory services for families and small businesses throughout Chicagoland. Reach out today to schedule your year-end review and get a head start on a stronger financial future.
