It’s that frantic time of year again. The holidays are in full swing, but if you’re like many investors, there’s a nagging thought in the back of your mind: taxes. With December 31 looming just days away, you might be wondering if there’s anything you can still do to ease next year’s tax burden. The good news? Yes, there are a few powerful moves left on the table.
I’ve seen it firsthand—clients who scramble at the last minute often end up saving thousands simply by taking action before the calendar flips. But timing is critical. Most strategies need to be wrapped up by year’s end to count for 2025. Let’s dive into what you can realistically tackle right now, even with the holiday hustle.
Smart Year-End Tax Strategies You Can Still Pull Off
While some popular tactics are off the table this late in the game, others remain wide open. The key is focusing on moves that don’t require months of planning. In my experience, these are the ones that deliver the biggest bang for your buck when time is short.
Tax-Loss Harvesting: Turning Losses into Tax Breaks
One of the classics is tax-loss harvesting. If you’ve got investments in a taxable brokerage account that have dipped in value this year, selling them now can help offset capital gains elsewhere in your portfolio.
Here’s how it works in simple terms: You sell the losing positions, realize the loss, and use it to cancel out gains from winners you’ve sold. If your losses exceed your gains, you can even apply up to $3,000 of the excess against your ordinary income. Anything beyond that carries forward to future years.
This year has been kind to the markets overall—the S&P 500 has climbed solidly—but not every stock or fund has kept pace. Plenty of investors still have unrealized losses hiding in their accounts. Spotting those and acting quickly can make a real difference.
Even in a bull market, there are always pockets of underperformance you can harvest.
– Financial planner based in Florida
And don’t worry too much about settlement dates. As long as you place the trade by December 31, it counts for 2025, even if it settles a couple of days later. Just be mindful of wash-sale rules: if you want to repurchase the same or a substantially identical security, wait at least 31 days to avoid disqualifying the loss.
- Review your brokerage statements for positions showing losses
- Calculate potential offsets against realized gains
- Place sell orders before markets close on New Year’s Eve
- Consider replacing sold assets with similar (but not identical) ones to stay invested
Perhaps the most interesting aspect is how straightforward this can be with today’s online tools. Many platforms even flag potential harvesting opportunities for you. If you’ve been putting it off, now’s the moment to log in and take a look.
Tax-Gain Harvesting: A Lesser-Known Opportunity
With markets performing well, fewer people have losses to harvest. But that opens the door to the flip side: tax-gain harvesting. This strategy involves intentionally selling winners when your income puts you in the 0% long-term capital gains bracket.
If your total taxable income for the year falls below certain thresholds—roughly $47,025 for singles or $94,050 for married couples filing jointly in 2025—you can realize gains tax-free. It’s a way to reset the cost basis on appreciated assets without owing Uncle Sam a dime.
Why bother? Higher future income could push you into the 15% or even 20% capital gains bracket. By harvesting gains now, you lock in the lower rate (zero, in this case) and give yourself more flexibility down the road.
This move is especially useful for retirees, early retirees, or anyone in a temporarily low-income year. You might sell shares, pay no tax, then repurchase them immediately—raising your basis so future gains are smaller when you eventually sell again.
- Estimate your 2025 taxable income carefully
- Identify how much room you have in the 0% bracket
- Select highly appreciated assets to sell
- Execute trades before December 31
- Document everything for tax reporting
In practice, I’ve found this tactic often gets overlooked because it feels counterintuitive—why trigger gains on purpose? But when the math works, it can be a game-changer for long-term tax efficiency.
Roth Conversions: Setting Up Tax-Free Growth
Another year-end favorite is the Roth IRA conversion. This involves moving money from a traditional IRA (pre-tax) into a Roth IRA, paying taxes on the converted amount now in exchange for tax-free withdrawals later.
Why do it at year-end? By December, you have a much clearer picture of your annual income. That precision helps you convert just enough to fill a tax bracket without pushing yourself into a higher one.
The process can be remarkably quick if you already have a Roth account open. Many custodians allow “in-kind” conversions—transferring shares directly without selling—meaning the move can complete almost instantly.
We target the most appreciated funds for conversion to maximize future tax-free growth.
– Certified financial planner in the Mid-Atlantic region
The biggest hurdle right now? Setting up a new Roth IRA if you don’t have one. With holiday schedules, approval times might stretch, so act fast. Once established, though, conversions can often be processed right up to the deadline.
Consider your current versus expected future tax rates. If you anticipate being in a higher bracket during retirement—or if tax rates rise overall—a conversion could pay off handsomely. Plus, Roth IRAs have no required minimum distributions, giving you more control in retirement.
What You Can’t Do at the Last Minute
To keep expectations realistic, some popular strategies are simply too late. Charitable contributions of cash are easy enough—write the check or donate online by December 31—but donating appreciated securities requires more lead time for transfer and valuation.
Bunching deductions for itemizing? That usually needs planning earlier in the year. Same with maximizing employer retirement plan contributions if you’ve already hit payroll limits.
One bright spot: Traditional IRA and HSA contributions can wait until the tax filing deadline next spring and still count for 2025. So if you’re short on time now, mark your calendar for those.
Navigating Holiday Trading Hours
Practical tip: Markets have abbreviated hours on Christmas Eve and are closed Christmas Day. New Year’s Eve, however, is a full trading day—perfect for last-second moves. Check your brokerage’s holiday schedule for customer service and trade cutoffs.
If you’re working with an advisor, give them a heads-up ASAP. Many firms slow down over the holidays, and you don’t want paperwork delays derailing your plans.
Looking Ahead: Potential Refund Boosts
Interestingly, some taxpayers might see larger refunds next year regardless of last-minute moves. Changes from recent legislation meant many employers didn’t adjust withholding fully, potentially leaving extra money in your paycheck that shows up as a refund.
Of course, a bigger refund just means you gave the government an interest-free loan. Going forward, consider tweaking your W-4 to better match your liability—but that’s a topic for the new year.
In the meantime, focus on what you can control right now. Even modest action this week could translate into meaningful savings when you file.
Tax planning doesn’t have to be overwhelming, especially when you zero in on high-impact, time-sensitive opportunities. Whether it’s harvesting losses, realizing tax-free gains, or converting to a Roth, these strategies remind us that a little year-end attention can go a long way.
As the clock ticks down, take a breath, review your accounts, and make the moves that fit your situation. Your future self—and your wallet—will thank you.
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