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Tax Moves to Make Before the End of the Year to Maximise Your Refund

18 Oct

Tax Moves to Make Before the End of the Year to Maximise Your Refund

by calum
in Uncategorized
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As the year draws to a close, now is the perfect time to take action and boost your potential tax refund. The steps you take between now and December 31 can make a real difference when tax season arrives. Whether you’re employed, self-employed, or managing multiple income streams, smart end-of-year tax planning can help you keep more of your hard-earned money.

Here are the most effective tax moves you can make before the calendar flips to 2026.

Review and Adjust Your Tax Withholding

If you’ve received a smaller refund than expected in the past—or worse, owed money—you may need to adjust your withholding. Take a look at your year-to-date income and tax paid. If you’re under-withholding, you can ask your employer to withhold a little extra from your final paychecks of the year to help close the gap.

You can use a Tax Refund Calculator to estimate where you stand now and whether adjustments could improve your refund outlook.

Boost Retirement Contributions

Contributions to retirement accounts like a 401(k) or traditional IRA can reduce your taxable income and increase your refund. If you’re not yet at the annual contribution limit, consider topping up before the year ends.

For 2025, you can contribute up to:

  • $23,000 to a 401(k) (plus a $7,500 catch-up if you’re over 50)

  • $7,000 to a traditional IRA (plus a $1,000 catch-up if over 50)

These contributions must be made by December 31 (for 401(k)s) or April 15 (for IRAs), but acting early gives you a head start.

Make Charitable Donations

The holiday season is the perfect time to give—and charitable donations can also reduce your tax bill. Donations to qualifying charities made before December 31 are deductible if you itemise your return.

Don’t forget that:

  • Donations of money, goods, and even mileage for volunteer work may qualify

  • You’ll need receipts or records for all charitable gifts

  • Contributions must go to IRS-recognised charities (U.S.) or registered charities (UK)

Take Advantage of Tax Credits

Unlike deductions, tax credits reduce your tax bill pound for pound, which can significantly increase your refund.

Before year-end, check your eligibility for credits such as:

  • Earned Income Tax Credit (EITC)

  • Child Tax Credit

  • Education credits like the American Opportunity Tax Credit (AOTC) or Lifetime Learning Credit

Many of these credits are based on your income and dependents, so make sure your information is accurate and up to date.

Time Your Income and Expenses Wisely

If you’re self-employed or have control over when you receive income or pay expenses, you might be able to time them strategically.

  • Defer income to 2026 if you’re close to entering a higher tax bracket

  • Accelerate expenses into 2025 to claim deductions now—this includes equipment, subscriptions, and mileage

Just make sure you maintain clear documentation and only defer or accelerate when it makes financial sense overall.

Use Up Flexible Spending Account (FSA) Funds

If you have a workplace FSA, check the balance now. Many FSA plans have a “use it or lose it” rule by December 31. Eligible expenses include medical appointments, prescriptions, dental work, and more.

Some plans allow a small rollover or grace period into the new year—but if not, spending your FSA balance now could mean the difference between losing money or maximising its tax benefit.

Harvest Investment Losses

If you’ve sold any investments at a gain this year, you may be able to offset them by harvesting losses—selling underperforming assets to create a capital loss.

These losses can:

  • Offset capital gains

  • Reduce taxable income by up to $3,000 per year

  • Be carried forward to future years if they exceed your gains

This strategy is best used carefully, ideally with the help of a financial advisor, but it’s a powerful tool for those with investment income.

Keep Your Records Organised

Now is the time to gather receipts, invoices, charitable donation records, and any other documentation you’ll need for filing. Keeping things organised now saves you time in January and helps ensure you don’t miss deductions or credits that could boost your refund.

Estimate Your Refund Before Year-End

A few minutes spent on the Tax Refund Calculator can help you assess where you stand and what moves to make in the final weeks of the year. If it looks like you’ll owe, there’s still time to adjust. If you’re set to receive a refund, you can plan ahead for how to use it wisely.

Final Thought:
The last few months of the year offer a golden opportunity to reduce your tax liability and increase your refund. By taking action now—whether it’s donating, contributing to retirement, or fine-tuning your withholding—you’ll be in a stronger position when tax season arrives. Don’t wait until January to think about your taxes—your refund could depend on what you do today.