12/08/2025
2025 Year-End Tax Planning Reminders
With the close of 2025 rapidly approaching, now is the time to make sure you are ready for the upcoming tax filing season. As a first step, gather up records like receipts or bank statements showing potentially deductible expenses like mortgage loan interest, charitable contributions and student loan interest. To take advantage of new deductions created under the One Big Beautiful Bill Act (OBBBA), you may also need proof of car loan interest paid, overtime pay received and/or tips reported to your employer.
Starting in mid-January, watch for tax statements you will need to prepare your return, such as Form W-2, college tuition statements, Form 1095-A (Health Insurance Marketplace Statement), and 1099 forms showing income from interest, dividends, rents or self-employment. You may get these documents in the mail, or receive notifications explaining how to access digital copies online. Organizing all of these critical documents as early as possible can save you a great deal of time and stress later.
Over the remaining weeks of 2025, keep an eye on the status of any flexible spending arrangements (FSAs) you and/or your spouse have through workplaces. Remember, with only limited exceptions, you will generally need to use up the balances in those accounts by December 31 in order to maximize tax savings and avoid forfeiting funds to your employer. If your employer’s open enrollment period for 2026 cafeteria benefit plans is still in progress, now is also the time to finalize your contribution amounts. For example, if you are struggling to use up your 2025 FSA balance, you may wish to reduce your monthly contributions next year.
For many people, vehicle mileage records also play an important role in ensuring that they do not miss out on valuable deductions. In particular, you may be able to deduct car or truck expenses if you use your personal vehicle for self-employment activities, or to drive yourself, your spouse or a dependent to receive medical care if you itemize deductions. Properly documenting your mileage now will help you maximize your deduction at filing time.
Finally, as you plan charitable giving for the holiday season, keep in mind that the deduction rules for donations will change in 2026. If you itemize deductions, then your maximum deduction amount may decrease slightly under the new rules. On the other hand, if you use a standard deduction, you may have the opportunity to claim a special deduction for qualifying cash donations in 2026, but not this year. Therefore, your specific tax circumstances may influence whether you will get a larger tax benefit by donating now, or waiting until the New Year.
