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Here’s what should be on every taxpayer and business owner’s year-end checklist.
As the year draws to a close, December is one of the most important months for taxpayers — especially in 2025. With several major tax credits expiring, contribution deadlines approaching, and strategic planning opportunities that disappear once the clock strikes midnight on December 31, taking action now can significantly reduce your tax bill.
Whether you’re a small business owner, employee, freelancer, investor, or homeowner, understanding what needs to be done before year-end is crucial. December isn’t just holiday season — it’s tax season preparation time.
Let’s break down the most impactful tax moves for December 2025 in clear, simple terms so you know exactly what to do, what’s changing, and how to take advantage of expiring benefits.
Many tax strategies must be completed before December 31 to count for the 2025 tax year. Payroll adjustments, capital gains harvesting, retirement moves, charitable giving, and several energy credits all require year-end action.
2025 is especially important because it’s the final full year for many incentives under the Inflation Reduction Act and certain provisions of the Tax Cuts and Jobs Act — both of which begin expiring or phasing out in 2025.
Act now, plan smart, and you can position yourself for major savings.
Retirement contributions remain one of the most powerful ways to reduce your taxable income.
In 2025, the IRS allows the following contribution limits:
💡 Tip: If you want the Saver’s Credit, increasing your final pay-period contribution could help you qualify — the credit is based on contributions made by the filing deadline, not only by December 31.
Under current U.S. tax law (post‑One Big Beautiful Bill / OBBBA), the Residential Clean Energy Credit (for solar, battery storage, geothermal, etc.) remains valid through December 31, 2025 for systems placed in service by then. That means: if you want the credit, your installation — including permits, interconnection, and final “live” status — must be completed by year-end.
Under the updated law, the Energy Efficient Home Improvement Credit remains available through December 31, 2032. So unlike the solar/clean‑energy credit, efficiency upgrades still enjoy a longer window.
The tax credit for installing a home EV charger appears to have been extended to June 30, 2026, under recent legislation. So if you install a qualified charger before that date (and meet other eligibility rules), you could still claim a credit.
The New Clean Vehicle Credit and Previously‑Owned Clean Vehicle Credit both expire on September 30, 2025. To qualify, a binding written contract and payment must be made by that date.
💡 Tip: If you’ve been considering solar, a home EV charger, or an EV — now is the time. December tends to be hectic for contractors and installers as everyone scrambles to meet the 2025 deadlines.
December is prime tax-loss harvesting season.
💡 Popular December Move: Sell losing positions on December 30–31, realize the loss, and repurchase a similar but not “substantially identical” asset in January.
Donations are deductible for 2025 only if made by December 31.
Deductible contributions include:
💡 Big December Strategy: Donate appreciated stocks instead of cash. You bypass capital gains and deduct the fair market value.
Avoid penalties by ensuring you’ve paid enough tax during the year.
December is the last chance to adjust your withholding or prepare for the January 15 estimated tax deadline.
Flexible Spending Accounts (FSAs) operate on a “use it or lose it” rule.
Check your employer’s policy and spend remaining funds before the deadline. Eligible items include: Glasses, contacts, over-the-counter meds, therapy copays, dental work, and more.
💡 December Tip: Stock up on FSA-eligible necessities using your remaining balance.
If you’re age 73 or older in 2025, you must take your RMD by December 31, unless it's your first RMD year. Missing it triggers a steep 25% penalty (which can drop to 10% if quickly corrected). You can also use a Qualified Charitable Distribution (QCD) to donate up to $105,000 tax-free directly from your IRA.
2025 is a major transition year. Several individual tax cuts introduced under the Tax Cuts and Jobs Act (TCJA) expire on December 31, 2025.
Roth conversions are taxable but tax-free later — and December is the final chance to convert income for 2025. This strategy is especially attractive in 2025 because tax rates are scheduled to increase in 2026 unless Congress intervenes.
Good documentation reduces audit risk and simplifies filing.
💡 Tip: Categorize everything as you go — not in February.
For any year-end tax strategy — energy upgrades, charitable contributions, capital gains planning, retirement contributions — documentation matters.
Organize these now, not during filing season.
December tax planning in 2025 is more important than ever, with several key incentives expiring and the tax landscape shifting in 2026. By acting now, staying organized, and taking advantage of sunsetting credits, you can significantly lower your tax burden and head into the new year financially confident.
Small steps — like increasing your 401(k) contribution or scheduling an installation — can translate into major tax savings.
If you're unsure which year-end strategies apply to you or want help organizing your tax situation for 2025, a tax professional can help you:
Vincere Tax can help you with business taxes, stocks, bonds, ETFs, cryptocurrency, rental property income, clean energy credits, retirement strategies, and more.
This post is for informational purposes only and not legal, tax, or financial advice. Each individual should consult their own advisor. Vincere accepts no responsibility for actions taken based on this content.
For business tax planning articles, our tax resources provides valuable insights into how you can reduce your tax liability now, and in the future.
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