By John Geantasio, CPA
As the year draws to a close, many people focus on holiday plans, year-end business reviews, or personal resolutions. But smart individuals and business owners know that this is also the most critical window for strategic tax planning. Investing before December 31 can dramatically lower your tax bill, boost long-term financial outcomes, and help you make the most of the tax code’s incentives.
When you wait until April, your options are limited. You’re simply reporting what already happened. But when you plan in November and December, you’re in the driver’s seat—steering your tax liability, your deductions, and ultimately, your wealth-building strategy.
This article breaks down key investment opportunities available before year-end, and why acting now can pay off—both immediately and for years to come.
Timing Is Everything: Why You Should Act Before December 31
There’s a hard cutoff in the tax world—midnight on December 31. Any strategic moves made after that point apply to next year’s taxes, not the current one. That’s why year-end is your last and best chance to influence how much you’ll owe or save on your tax return.
This is especially important for individuals nearing income thresholds that could bump them into higher tax brackets, trigger phaseouts for deductions, or subject them to additional taxes like the Net Investment Income Tax. Similarly, business owners must assess profits, plan expenditures, and determine how best to reinvest income before the books close for the year.
The key takeaway? The tax code favors those who prepare—not those who react.
One of the most effective and IRS-approved ways to lower your taxable income is by making contributions to retirement accounts. These contributions not only benefit your future self but also offer immediate tax advantages.
For individuals, traditional IRAs and 401(k)s offer pre-tax contributions. This means the money you put into these accounts reduces your current year’s taxable income. The contribution limits vary, but in 2025, individuals under 50 can contribute up to $7,000 to an IRA and $23,000 to a 401(k). Those over 50 can make additional catch-up contributions, which can make a big difference in reducing taxable income.
For business owners and self-employed individuals, the opportunities are even greater. A Solo 401(k), SEP IRA, or a defined benefit pension plan can allow much higher contributions based on income. These plans not only reduce taxable income but can help shield substantial earnings from taxation—especially important for high-income professionals or profitable business owners looking to reduce end-of-year tax liabilities.
A properly structured retirement plan can yield tens of thousands of dollars in tax savings annually while helping build a strong, diversified retirement nest egg.
Strategic Business Investments: Section 179 and Bonus Depreciation
Business owners have a powerful incentive to make investments in their companies before year-end. Thanks to Section 179 of the IRS tax code and the current bonus depreciation rules, qualified purchases of equipment, software, vehicles, and other tangible assets can be fully expensed in the same year they’re purchased.
This means that if you buy a $50,000 piece of equipment and put it into service before December 31, you could potentially deduct the full $50,000 on this year’s tax return—rather than depreciating it over five or seven years. That’s an immediate reduction in taxable income and a powerful incentive to reinvest in your operations.
This strategy can be particularly useful for businesses with strong profits in the current year and plans to grow or scale. Purchasing new computers, upgrading systems, investing in manufacturing equipment, or even expanding your office can yield both operational improvements and significant tax savings.
The bonus depreciation allowance is currently set at 80% for 2025, meaning you can deduct 80% of qualified assets upfront and depreciate the rest over time. This rule is gradually phasing out in coming years, so now is an excellent time to take advantage of it while the benefits are still strong.
Health Savings Accounts: Triple Tax Benefits in One Move
A Health Savings Account (HSA) is one of the most underutilized but tax-efficient investment tools available. For individuals with a high-deductible health plan, contributing to an HSA offers what is often referred to as a “triple tax benefit.”
First, contributions to an HSA are tax-deductible, which lowers your taxable income. Second, the money inside the HSA grows tax-free—similar to a Roth IRA or traditional retirement account. Third, withdrawals for qualified medical expenses are also tax-free.
This combination makes the HSA unique. It’s the only investment vehicle that offers tax breaks going in, tax-free growth, and tax-free withdrawals. For 2025, individuals can contribute up to $4,150, while families can contribute up to $8,300. Those aged 55 and older can add an extra $1,000 in catch-up contributions.
Not only does the HSA help with current medical costs, but it also serves as a long-term savings vehicle for future healthcare needs—even in retirement, when medical expenses often rise. Making a year-end contribution to your HSA can lower your taxes now while preparing for those future costs.
Tax-Loss Harvesting: Turn Investment Losses into Tax Savings
If you’ve experienced losses in your investment portfolio this year, there’s a silver lining: those losses can be used to lower your taxes. This strategy is known as tax-loss harvesting.
The idea is simple: you sell investments that have declined in value to realize a capital loss. That loss can be used to offset capital gains from other investments. If your losses exceed your gains, you can use up to $3,000 of that loss to reduce ordinary income. Any unused losses can be carried forward to future years.
Tax-loss harvesting is especially valuable in volatile markets or when rebalancing a portfolio. You don’t have to permanently exit the market either—you can reinvest in a similar (but not “substantially identical”) asset after the sale, preserving your investment strategy while capturing the tax benefit.
Acting before December 31 is crucial. You must execute the sales in this calendar year for the losses to apply to your upcoming tax return. It’s a smart way to clean up your portfolio and reduce your tax burden at the same time.
Charitable Giving: Support Causes and Get a Tax Deduction
Donating to charity isn’t just generous—it’s also tax-smart when done correctly. Contributions to qualified 501(c)(3) organizations made before year-end can be deducted on your tax return, provided you itemize your deductions.
Cash donations are the most straightforward, but donating appreciated assets like stocks or real estate can offer even greater tax benefits. When you donate appreciated assets held for over one year, you can deduct the full fair market value without paying capital gains tax on the appreciation. That’s a powerful two-for-one advantage: you reduce your taxable income and avoid capital gains.
In addition, donor-advised funds (DAFs) allow you to make a large donation in the current year for immediate tax benefits while distributing the money to various charities over time. This strategy is useful for individuals experiencing a high-income year who want to lock in a deduction now while planning future philanthropic efforts.
To take advantage of charitable deductions for 2025, donations must be made by December 31. Make sure to get proper documentation and receipts to support your claim.
Investing in Your Business for Growth and Efficiency
Tax savings aren’t limited to equipment purchases. Other investments in your business—such as marketing campaigns, software upgrades, staff training, or hiring consultants—can also be deductible if incurred before year-end.
These types of expenses don’t just reduce taxes. They also improve your business’s performance, help you scale more efficiently, and strengthen your market position for the year ahead. For example, investing in a professional website redesign or automating key operations might seem like a cost now—but if done strategically before December 31, it can pay off with both a tax deduction and long-term ROI.
Business owners should meet with a CPA to evaluate the timing and classification of these expenses, ensuring they qualify as deductions under IRS rules. With the right plan, every dollar reinvested in your business could mean a smaller check to the IRS come April.
Year-End Planning = More Control and Bigger Savings
Tax planning isn’t about loopholes or tricks—it’s about using the law to your advantage. The tax code is full of opportunities for those who plan ahead and make proactive decisions. And the window to take action closes sharply on December 31.
Whether you’re a high-income individual, a growing business, or someone nearing retirement, there are opportunities to reduce your tax burden while investing in your future. From retirement accounts and HSA contributions to business expenses and charitable giving, every decision you make now can help you pay less in taxes—and keep more of what you earn.
John’s Advice: Don’t Wait—Plan Now
Waiting until tax season to think about your taxes is like trying to win a race after it’s already finished. By then, your options are limited and the results are locked in. That’s why John Geantasio, CPA works closely with clients every fall to create customized year-end strategies that maximize savings and minimize surprises.
As John puts it:
“Tax savings aren’t found in April. They’re created in December.”
Don’t leave your tax situation to chance. Whether you need help with retirement contributions, business investments, or charitable giving strategies, now is the time to act.
Ready to Save Thousands? Let’s Talk.
Schedule your year-end tax planning session with John Geantasio, CPA today. With the right moves before year-end, you could save thousands—and start the new year in a much stronger position.
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