1. Estimate Your Income for the Year

• Project wages, self-employment, rental, investment, and retirement income
• Consider any large one-time income (bonuses, stock sales, inheritances)

2. Review Your Tax Withholding and Estimated Payments

• Use the IRS Withholding Estimator (or your tax software/professional)
  
  
• Adjust W-4 if needed to avoid underpayment penalties or large refunds
  
  
• Make estimated quarterly payments if you're self-employed or under-withheld

3. Maximize Tax-Advantaged Account Contributions 401(k), 403(b), or TSP:

• Contribute up to the annual limit ($23,000 in 2025; + $7,500 if over 50)
  
  
• IRA/Roth IRA: $7,000 limit in 2025 (+$1,000 catch-up over 50)
  
  
• Health Savings Account (HSA): $4,300 single / $8,550 family (+$1,000 catch- up if over 55)
  
  
• 529 Plans: Contribute for tax-free growth on qualified education expenses

4. Harvest Capital Gains or Losses Strategically

• Offset gains with losses ("tax-loss harvesting")
  
  
• Consider the impact of capital gains on your marginal tax rate or Medicare premium brackets

5. Manage Required Minimum Distributions (RMDs) (If 73 or older)

• Calculate and take RMDs from traditional IRAs and 401 (k)s Missed RMDs incur a 25% penalty-ensure compliance
  
  
• Move money from traditional IRA to Roth while in a lower tax bracket
  
  
• Pay taxes now to reduce future RMDs and create tax-free income

7. Track and Maximize Deductions

• Charitable donations (cash, stocks, donor-advised funds)
  
  
• Mortgage interest, property taxes, medical expenses, business expenses
  
  

  Use standard vs. itemized deduction comparison

  8. Plan for Self-Employment Income and Deductions (if applicable)

  Deduct business expenses, home office, mileage, retirement contributions Consider establishing a Solo 401(k) or SEP IRA

  9. Understand Your Tax Credits

  Child Tax Credit, Earned Income Credit, Education Credits (AOTC, LLC) Energy Efficiency Credits for EVs, solar panels, and home upgrades

  10. Watch Out for Income Phaseouts and Cliffs

  Many credits/deductions phase out at certain income levels Understand brackets that affect IRMAA, ACA subsidies, or child credits

  11. Organize Tax Documents Throughout the Year

  Save W-2s, 1099s, investment income, property tax bills, receipts Use digital folders or secure cloud storage for easy access

  12. Plan Charitable Giving Strategically

  Bundle donations in one year to itemize Donate appreciated stock instead of cash Use Qualified Charitable Distributions (QCDs) if over age 701/2

  13. Review Last Year's Tax Return

  Identify missed opportunities or recurring issues Use as a baseline for forecasting this year's tax position

  14. Consult with a Tax Advisor or Planner

  Especially if you have major changes (retirement, business sale, inheritance) Proactive advice can uncover savings opportunities or avoid pitfalls 15. Prepare for Tax Filing Early Gather documents as they come in (January-March) Choose whether to file yourself or hire a professional Avoid last-minute errors or delays