How to Maximize Year-End Tax Moves Before December 31st

As the year winds down, many high-earning professionals - especially physicians finishing a busy quarter, attorneys closing cases, and tech employees heading into bonus season - are staring down one last financial deadline: December 31st. The tax code resets at midnight, and several of your most powerful planning levers expire with it.

Below is a simple, structured walkthrough of the smartest year-end tax opportunities to consider right now. These moves won’t replace advice from your CPA or advisor, but they will help you understand what’s at stake before the deadline passes.

1. Max Out Tax-Advantaged Accounts Before They Reset

Many contribution limits are “use it or lose it” each calendar year. Missing them can cost thousands in unnecessary taxes.

What to check:

• 401(k) / 403(b): The 2025 employee limit is likely similar to 2024’s $23,000 range (verify with your plan). High earners should also check mega backdoor Roth eligibility - a powerful but underutilized tool for tech professionals and business owners.
  
  
• Backdoor Roth IRA: Contributions must occur by year-end if you want the conversion to count for the tax year. Attorneys and physicians with high AGI typically rely on this route.
  
  
• HSA (if eligible): If you have a high-deductible health plan, the HSA remains one of the most tax-efficient vehicles available.
  
  

Why it matters:

These accounts reduce taxable income, grow tax-deferred or tax-free, and compound over decades. For a 35 year-old earning $300K, maxing all available accounts could potentially reduce taxable income by $30K–$40K.

2. Review Employer Compensation Events - Especially Equity

This season is heavy with RSU vesting, year-end bonuses, and open enrollment updates. Tech professionals and business owners need to be especially mindful of how this income flows into their tax bracket.

What to review:

• RSU vesting schedules: Large December vests often push earners into higher tax brackets - triggering AMT or phaseouts.
  
  
• Bonus withholding: Employers often default to flat 22% federal withholding, which may be far below your actual rate.
  
  
• Equity liquidation strategy: Even if you don’t sell before year-end, reviewing unrealized gains now can set you up for a January tax-loss harvesting opportunity.
  
  

Case example:

A 32-year-old software engineer at a pre-IPO startup realized their December RSU vesting would push their income into the 35% bracket. By increasing pre-tax retirement contributions and adjusting withholding proactively, they reduced an unexpected April tax bill by nearly $7,000.

3. Leverage Tax-Loss Harvesting (and Beware of Wash Sales)

With markets showing pockets of volatility throughout Q4, this is prime time to offset capital gains.

How it works:

You sell investments at a loss, realizing a deductible capital loss, and reinvest the proceeds into a similar - but not “substantially identical” - investment to maintain market exposure.

Important reminders:

• Losses first offset gains, then up to $3,000 of ordinary income.
  
  
• Avoid repurchasing the same security within 30 days to prevent a wash sale.
  
  

Who benefits most:

Business owners who sold part of their company this year, tech employees who exercised ISOs/NSOs, or investors with appreciated assets.

4. Make Year-End Charitable Contributions - Strategically

If you are philanthropic and tax-aware, December is your most impactful month.

High-leverage giving strategies:

• Donor-Advised Funds (DAFs): Physicians and partners at law firms often use DAFs to “bunch” several years’ donations into one tax year to exceed the standard deduction.
  
  
• Donate appreciated stock: Avoid capital gains entirely while taking a deduction on the full value.
  
  
• Qualified Charitable Distributions: Available only if you’re 70½+, but important for older high-earning business owners.
  
  

Mini case study:

A surgeon donating $15,000 in appreciated ETF shares avoided ~$3K in capital gains taxes while securing a full charitable deduction.

5. Run a Quick Projection Before It’s Too Late

Even a simple year-end tax projection can help you avoid surprises. Most issues professionals face in April - under-withholding, missed deductions, forgotten contributions - were fixable in December.

What to check:

• Expected income vs. actual withholding
  
  
• Projected AMT exposure
  
  
• Itemized deduction eligibility
  
  
• Phaseouts (Child Tax Credit, Student Loan interest, QBI deduction, etc.)
  
  

If your compensation is irregular—as is often the case for partners, shareholders, and equity-compensated employees - this step becomes essential.

Conclusion: Use December Wisely - Your April Self Will Thank You

Year-end tax planning isn’t about complexity. It’s about using the narrow window before December 31st to lock in opportunities that won’t be available again until next year.

If you're unsure where to begin, start with contributions, review compensation events, run a quick tax projection, and make intentional moves before the calendar flips. The earlier you act, the more options you have.

 

  

 

Disclaimer:

This content is for educational purposes only and is not investment, tax, or legal advice. Always consult qualified professionals for guidance specific to your situation.