5 Smart Year-End Tax Moves for High-Income Families

Now is a great time for high-income earners to evaluate tax-saving opportunities before year-end. With a few strategic moves, you can potentially reduce your tax bill and make the most of your hard-earned income. Here are five tax-smart strategies to consider before December 31st.

1. Maximize Retirement Account Contributions

If you’re a high-income earner, maximizing contributions to your retirement accounts is one of the most effective ways to lower your taxable income. Whether you’re self-employed or a W-2 employee, contributing to pre-tax retirement accounts can help reduce what you owe.

2025 Contribution Limits:

• The employee contribution limit is $23,500 (under age 50).
• If you’re over 50, you can contribute an additional $7,500 in catch-up contributions, totaling $31,000.
• The combined employee and employer contribution limit for a 401(k) is $70,000.

Self-employed individuals can contribute both as an employee and employer, just be mindful of contribution deadlines: employee contributions must be made by December 31, while employer contributions can be made up to the federal tax filing deadline.

2. Max Out HSA Contributions

Health Savings Accounts (HSAs) offer a powerful triple tax advantage: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are also tax-free. HSAs are especially valuable for those with high-deductible health plans.

2025 Contribution Limits:

• $4,300 for individuals
• $8,550 for families

New HSA-eligible expenses now include items like Oura rings and health app subscriptions. While you can use funds now, letting your HSA grow until retirement may offer greater long-term benefits.

3. Make Charitable Donations

Charitable giving can be a meaningful and strategic way to reduce your taxable income. Contributions to qualified organizations are typically deductible up to 60% of your adjusted gross income (AGI), and excess amounts can usually be carried over to future years.

For those age 70½ and older, a Qualified Charitable Distribution (QCD) from an IRA allows you to donate directly to a charity, satisfying required minimum distributions (RMDs) and reducing taxable income.

4. Contribute to 529 College Savings Plans

Many states offer tax benefits for 529 plan contributions. In Georgia, for example, you can deduct up to $8,000 per beneficiary on your state tax return. A family with three children could potentially deduct $24,000 if each child’s account receives $8,000 in contributions.

Be sure to check your own state’s rules, as similar deductions may be available where you live, making this a smart way to save for future education costs while lowering your current-year tax burden.

5. Use Tax-Loss Harvesting to Offset Gains

Tax-loss harvesting is a strategy that involves selling investments at a loss to offset realized capital gains. Even if your portfolio is up overall, specific “lots” of your ETFs or stocks might be in the red.

For example, you may own an ETF like VTI that has appreciated overall, but one purchase lot within it may be showing a loss. Selling that lot allows you to recognize a loss and potentially realize a gain elsewhere in your portfolio, without triggering a taxable event.

What Smart Tax Moves Should You Make?

Don’t wait until the last minute to explore your tax-saving options. Working with a financial advisor can help you identify which strategies best fit your situation and maximize your end-of-year financial planning. Schedule a consultation with one of our financial advisors today to create a customized plan that helps you make the most of every opportunity.