Year-End Tax Items To Review Before December 31

Weeks ago, back-to-school was in full swing. Weeks away, holiday lights will twinkle anew. The end of the year is suddenly upon us; Q4, well underway.

For investors, savers, and spenders alike, the shifting seasons mark your last chance to spend and strategize your way to a lower 2025 tax bill. Among this year’s unique considerations: rising maximums, expiring credits, and a brand new slate of deductions for auto purchases.

Not all items apply to every taxpayer. Eligibility, income limits, documentation, and federal/state differences may apply; some provisions are time-limited or pending guidance from the IRS or Treasury Department. But for those who qualify, here are a few of the new or expiring tax moves to consider:

New Auto Loan Interest Deductions

Your benevolent Uncle Sam is pitching in to help with that breathtaking car payment. Starting in 2025, up to $10,000 in interest can be deducted from your income. As with many deductions, it begins to phase out for those making more than $100,000 per year.

Expiring Energy-Efficiency Credits

The credits designed to incentivize investment in “green energy” have officially fallen out of fashion in Washington. Any taxpayer hoping for a federal kickback on energy-efficient windows or water heaters should make haste to make the year-end cutoff.

Increased SALT Deduction

The Federal deduction for state taxes (such as state income tax or sales tax in tax-free states) just got a major upgrade. Its $10K cap was quadrupled, putting $40K in potential deductions on the table. Especially beneficial for those in high-tax states, the new allowance is also a boon for those who made high-dollar purchases in 2025. Sales tax on that new car? You might be able to deduct it.

No Tax on (Some) Tips & Overtime

A new tax carveout for 2025 is the federal government’s curb on taxes from tips and overtime. Up to $25,000 in tip income and $12,500 in qualified overtime pay could be yours, tax free. Your Q4 assignment: tracking and documenting away.

Parents, $2,200 Could Be Yours

The family-friendly child tax credit got a significant bump this year. The new number? Up to $2,200 per child (depending on income level). As a credit (not a deduction), the sum could shave $6,600 from the tax bill of a family of five. 

2025’s New Magic Number Could be $394,600

This year’s starkest line has been drawn. $394,600 is the magic number at which a married couple’s income will leap from the 24% to 32% tax bracket. For single filers, the same leap happens at $197,300. Those on the line would be well-advised to consider accelerating giving, deferring income, or contributing to an IRA.

3 Months Remain to Get Strategic

With less than 3 months on the clock, investors, savers, and strategic spenders have just weeks to find a financial advisor poised to help. A fiduciary is legally obligated to act in your best interest, whether considering your top-line gains or bottom-line tax bill. If you haven’t hired a financial advisor yet, a solution could be just a few questions away.

Click on your state to connect with a skilled financial advisor today.

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