With just hours left in 2025, some quick steps could help taxpayers keep more money in their pockets.
Sikich tax expert Bryan Lake said charitable giving is one option to consider before the year ends. That’s because starting in 2026, itemized charitable deductions will be reduced based on income.
“In 2026, there’s going to be a significant change in charitable contributions. Those individuals who itemize are required to reduce their itemized, their charitable contributions by a percentage,” Lake said.
For example, the reduction will be 0.5% of adjusted gross income for each donation. So someone earning $200,000 would see each charitable gift reduced by $1,000. That means donating now could mean a bigger benefit.
Another tip: If you expect to owe state or local taxes for this year, paying them before midnight could help. The cap on state and local tax deductions jumped from $10,000 to $40,000 under the One Big Beautiful Bill Act, but Lake said high earners face phase-outs. For those making over $500,000, the deduction is reduced by 3% of the amount over that threshold, and it is fully phased out for incomes above $600,000.
“So maybe you want to look and see, does it make sense that in the next two days, I make that estimated payment now to get that deduction now, as opposed to next year,” Lake said.
The reason? Paying now means you can claim the deduction on this year’s taxes instead of waiting a year, and for most people, that is money back sooner.
“If you think about time value of money, take the deduction currently, because it’s worth more now than it is tomorrow,” Lake said.
Buying a car before the new year could also yield a deduction. If you purchased a new U.S.-assembled car for personal use in 2025, you can deduct up to $10,000 in interest, something that was not allowed before.
And seniors have a new benefit this year. Those 65 and older can claim an extra $6,000 if single or $12,000 if married filing jointly on top of their standard or itemized deductions.
Other changes to keep in mind: Tips and overtime pay are no longer considered taxable income for 2025, which could mean a smaller tax bill for workers who earned extra this year.
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