Year-End Tax Moves Families & Small Businesses Should Make Before December 31st

As the year winds down, it’s the perfect time to pause, take stock, and make sure you're not leaving money on the table. Many of the most valuable tax-saving opportunities disappear at midnight on December 31, and once they’re gone… they’re gone.

At Freedom Tax & Accounting, we want our clients to end 2025 confident, prepared, and positioned for success when tax season begins. Whether you're a busy family or a small business owner, here are the most important year-end tax moves to consider right now.

1. Maximize Retirement Contributions
Traditional IRA and HSA contributions can typically be made until the tax filing deadline, but 401(k) contributions must be made by December 31.

Why this matters:
Retirement contributions reduce your taxable income, which can lower the amount you owe or increase your refund.

Action step:
- Increase your final pay-period 401(k) contributions if you haven’t maxed out.

2. Make Last-Minute Charitable Donations
Donations made by December 31 count toward your 2025 tax return.

This includes:
- Monetary gifts
- Donations of goods
- Mileage driven for volunteer work
- End-of-year community giving campaigns

Pro tip:
Keep donation receipts or screenshots. The IRS requires documentation.

3. Spend Down FSA Balances
If you have a Flexible Spending Account (FSA), check whether your plan has:
- A grace period,
- A carryover, or
- A “use it or lose it” rule.

Use leftover funds on:
- Glasses/contact lenses
- First aid supplies
- Over-the-counter meds
- Dental appointments

4. Review Withholding & Estimated Tax Payments
Families who received bonuses, changed jobs, or had shifts in income may need to adjust withholding.

Small business owners should review their fourth-quarter estimated payment, which is due January 15.

Why this matters:
Avoiding an underpayment penalty is easier (and cheaper) than fixing one.

5. Small Businesses: Consider Year-End Purchases
Section 179 and bonus depreciation still allow small businesses to deduct the full cost of certain equipment and software purchases.

Examples:
- Computers
- Office furniture
- Machinery
- Business vehicles
- Technology upgrades

6. Catch Up on Bookkeeping & Categorize Expenses
Clean books in December = smooth tax filing in the spring.

Small businesses should:
- Reconcile accounts
- Categorize every expense
- Ensure payroll totals are accurate
- Review contractor payments for 1099-NEC reporting
- Confirm mileage logs are complete

7. Review Your Eligibility for Credits
Review potential credits such as:
- Child Tax Credit
- Child & Dependent Care Credit
- Small business childcare credit
- Work Opportunity Tax Credit
- Educational credits
- Energy-efficiency home credits

These year-end steps can help reduce your taxable income, maximize your refund, avoid penalties, and set your family or business up for success in 2026.

At Freedom Tax & Accounting, we specialize in taking the guesswork out of year-end planning. If you’d like help reviewing your strategy, organizing your documents, or making smart tax moves before December 31—let’s talk.

Now scheduling year-end and 2026 tax appointments.
Message us or call today to reserve your spot.