When another year draws to a close, taxpayers everywhere need to take stock of their income, deductions, and credits for the year and take the necessary steps to minim✨ize their tax bills.

Here is a list of things you can do before you ring in the New Year to reduce the amount you owe Uncle Sam and perhaps pump up your refund.

Before You Start

Estimate your tꦆaxable income—think about wages, investment income, side gigs, and any pensions or other payments you expect to receive.

Next, figure out whether you should 澳洲幸运5官方开奖结果体彩网:itemize your deductions or take the standard deduction. The 澳洲幸运5官方开奖结果体彩网:Tax Cuts and Jobs Act (TCJA) increased the standard dedu꧂ction beginning in 2018 so itemizing may not make sense for you.

Have a look at the standard deduction for the different filing statuses for tax years 2024 and 2025:

In high-tax states, a trend toward not itemizing may also be enhanced by the cap on the amount you can deduct for 澳洲幸运5官方开奖结果体彩网:state and local taxes (SALT). It's $10,000—or $5,000 if married, filing separately.

If you find that it makes sense to itemize, review the following list and see if any of thes♚e strategies ꧂will help you minimize what you owe.

1. Get Deductions in Writing

If you have made any type of charitable contribution this year, get a written receipt for your records from the receiving organization. To deduct donations of more than $250, a receipt is required by the Internal Revenue Service (IRS).

The IRS now requires filers to break down their contributions on 澳洲幸运5官方开奖结果体彩网:Schedule A and be able to furnish proof that their contributions and deductions are genuine.

If your non-cash gifts, such as clothing or other tangible property, exceed $500 in total value, you will now have to include 澳洲幸运5官方开奖结果体彩网:Form 8323 with your return in order to claim the deduction. The amount that you can claim must e𒉰qual 🌞the proceeds paid to the charity when your item or items are sold.

However, if your donations are not sold before the end of the year, you will have to wait until they are before you can deduct an amount for them. For more, see the on substantiating non-cash contributions.

2. Defer Write-Offs

If it looks like you won’t itemize, consider deferring substantial year-end charitable contributions until next year if you think you may have a better chance of being able to write them off then. This could, for example, enable you to double next year's contribution, making it large enough to give you a better chance of qualifying for itemization.

This also goes for unreimbursed 澳洲幸运5官方开奖结果体彩网:medical expenses and other types of deductible transactions or expenses over which you can control the timing. Unreimbursed medical expenses in excess of 7.5% of 澳洲幸运5官方开奖结果体彩网:adjusted gross income (AGI) are deductible for all taxpayers—not just those aged 65 or older.

Also, if you make a charitable gift in December with your credit card and then pay it off later, it will be deductible for the month/year in which the gift was made.

Or Pay and Write Off Expenses This Year

Conversely, if you itemize your taxes, but it looks like you won't be able to do so next year, consider paying for expenses now that you might otherwise deduct next year. Doing so could beef up your refund for this tax year.

These could be charitඣable contributions, estimated quarterly state tax payments, medical expenses, and property taxes.

3. Time Gains and Losses

Work with a tax planner or investment advisor to determine whether, when, and how to sell any securities that have appreciated or depreciꦛated in value.

Long- and Short-Term Capital Gains

To deduct losses, you must be able to write them off against gains. Generally, you have to 澳洲幸运5官方开奖结果体彩网:write off losses from 🦋selling securities that you held for more than a year (long-term capital losses) against gains you made from selling other sec🍃urities held over a year (long-term capital gains).

Winners and losers you held for the short term (one year or less) must be treated the same way. You will then compute your net long- or short-term gains and losses against each other to arrive at a final net short- or long-term gain or loss.

If you are simply selling losers to write off against winners, be sure t🐼o place all your trades by the last 🎶business day of December at the latest in order to have them count for this year.

There's a 澳洲幸运5官方开奖结果体彩网:$3,000 limit on how much you can write off in one year on stock losses against your ordinary income; if you lost more, you may be able to deduct the remaining balance on your tax return next year.

4. Choose Your Cost Basis Carefully

There are several different ways to compute your cost basis, but the method you choose from one year to a♏nother can sometimes make a big diff🐭erence in your taxes.

For example, if you sell a lot of shares at a very large profit and must declare this income, you may be able to choose to use an identical number of shares that were purchased at a higher price as the basis (if not already used). The rules for this can be complicated and may require professional assistance.

Donate Shares

If you don’t have any lots that you can use for basis at a decent price, consider simply donating some or all 🌠of your appreꦉciated shares to charity.

You can take a deduction for the full fair market value up to certain limits and escape capital gains taxes altogether as long as you have owned the securities for more than a year. This can be done in lieu o🌟f a cash donation, which may ease your holiday budget.

Generally speaking, calc☂ulating and reporting cost basis is easier than it once was because financial firms are required by law to supply this information for all of your buy and sell transactions each year.

5. Realize Income, If Necessary

If your income turned out to be substantially less than you had anticipated, then you may be wise to sell appreciated securities or 澳洲幸运5官方开奖结果体彩网:convert a traditional IRA or retirement plan into a Roth account. This can allow you to use up tax credits and deductions that you might otherwise miss o🌱ut on.

For example, if you were laid off in February and couldn’t find another job until Thanksgiving, your combined deductions and credits may well exceed your income for the year. You can use this opportunity to effectively reduce or eliminate your tax bill on your appreciated securities or Roth conv🐭ersion by doing it now and crediting your deductions against it.

6. Make or💝 Increase Retirement Plan Contributions

Keep cash handy to make or increase your IRA or 澳洲幸运5官方开奖结果体彩网:employer-sponsored retirement plan c▨ontributions if your year-end income estimate shows that you might land in a higher tax bracket this year.

You can make IRA contributions until the filing deadline in April of the following year, but your 401(k) or 403(b) contributions must be made by Dec, 31. If you're 50 or older, you can make 澳洲幸运5官方开奖结果体彩网:catch-up contributions to most plans that will increase your tax deduction.

7. Buy for Next Year, Deduct This Year

If you're a business owner or have deductible professional expenses, purchase items by the end of this year that you need next year. This will allow you to write off the expense this year instead of next, and thus reduce your income. This can make an especially large difference if you are buying a major item.

The Bottom Line

There are a variety of steps that taxpayers can take to reduce their taxable income and otherwise minimize their income before the end of any year. Be sure to learn about the deductions that you're legally entitled to take. If you're self-employed, also check into 澳洲幸运5官方开奖结果体彩网:additional benefits for your tax situation.