Yes, Preparing Early Is Totally Worth It—Your Future Self Will Thank You
Year-end tax planning isn’t about being perfect or overly organized. It’s simply one of the best ways to lower your tax bill, reduce stress, and keep more of what you earned. With 2025 wrapping up, this is the ideal moment to take advantage of strategies that can make a real difference when tax season arrives.
At Trail CPA, we focus on helping clients make smart, proactive choices before December 31. Even small adjustments now can create meaningful savings later.
Why Year-End Tax Planning Matters
Below are some of the key strategies we encourage our clients to consider as the year comes to a close.
Maximize Retirement Contributions
Retirement accounts are powerful tools for cutting your tax bill. For 2025, you can contribute up to $23,500 to a 401(k), with an additional catch-up of $7,500 if you’re 50 or older. IRAs allow up to $7,000, plus a $1,000 catch-up. Adding more before the deadline can lower your taxable income and strengthen your long-term financial security.
Use Your Health Savings Account
If you have a high-deductible health plan, contributing to an HSA can offer meaningful tax advantages. Limits for 2025 are $4,300 for individuals and $8,550 for families. Contributions reduce your taxable income, grow tax-free, and can be withdrawn tax-free for medical expenses. It’s one of the most tax-efficient accounts available.
Set Up an Accountable Plan for S-Corps
For S-Corporation owners, an accountable plan allows you to be reimbursed for business-related expenses without treating those reimbursements as taxable income. This helps reduce the corporation’s taxable income, keeps records clean, and avoids unnecessary payroll taxes.
Donate Appreciated Stock
Donating stocks you’ve held longer than a year can be more tax-efficient than donating cash. You avoid capital gains taxes and can deduct the fair market value of the stock. The nonprofit receives a larger gift, and you receive a larger tax benefit.
Hire Your Child in Your Business
If your child can perform real and reasonable work for your business, paying them a wage can lower your taxable income and allow them to earn money tax-free up to the standard deduction. It’s a simple strategy that keeps more money within your household while teaching valuable skills.
Review Your Withholdings
Checking your withholdings before the end of the year can help prevent penalties, reduce surprises, and ensure your tax payments match your actual liability. Even small adjustments can make tax season much smoother.
How to Prepare for Tax Season Now
A little organization now will save time and stress later. Here are a few helpful steps:
• Gather income documents as they arrive
• Organize business receipts and mileage logs
• Upload documents to your client portal early
• Track major life or financial changes
• Review estimated tax payments
• Reach out with questions before filing season begins
Being proactive makes tax season much easier and allows us to file accurately and efficiently.
Should You Start Planning Now?
If you want to reduce your tax burden and avoid the last-minute rush, year-end planning is absolutely worth it. At Trail CPA, we work closely with clients to stay ahead of tax laws, maximize savings, and eliminate surprises.
If you’d like help building your year-end plan or preparing for tax season, we’re here to support you every step of the way.