Many people assume that once December 31st rolls around, their chance to save on taxes ends. But don’t worry! Even after the year ends, there are still several strategies you can use to reduce your tax bill and improve your financial health. 

This guide will take you through smart, practical steps for tax planning after the year ends. Whether you're an individual taxpayer or self-employed, there’s something in here for you.

Retirement Contributions You Can Still Make 

One of the easiest ways to get some last-minute tax savings is by contributing to your retirement accounts. Even if the calendar has flipped to a new year, you can still make contributions that count for the prior tax year.

Traditional and Roth IRAs 

Did you know you can contribute to your Traditional or Roth IRA until the April tax filing deadline? That’s right, this extended deadline gives you time to maximize your retirement savings and reduce your tax liability.

• Traditional IRA: Contributions may be tax-deductible, depending on your income and coverage by a workplace retirement plan.
• Roth IRA: While contributions aren’t tax-deductible, your growth and withdrawals are tax-free.

Nerd Note: The maximum IRA contribution in 2025 is $7,000 ($8,000 if you’re over 50), but always check to see how much you’re eligible to contribute. 

Backdoor Roth IRA for High Earners

If your income is too high to contribute directly to a Roth IRA, the Backdoor Roth IRA strategy might be perfect for you. Here’s how it works:

1. Contribute to a Traditional IRA with after-tax dollars.
2. Convert that money to a Roth IRA.
3. File Form 8606 with your tax return (something many DIY tax software's mess up)

Be cautious about the pro-rata rule, which can complicate this process if you already have funds in a Traditional IRA.

SEP IRA and Solo 401(k) 

For self-employed individuals, these accounts offer significant tax-saving opportunities:

• SEP IRA: You can contribute up to 25% of your net earnings from self-employment (up to $66,000 for recent years), and you have until your tax filing deadline, including extensions, to do so.
• Solo 401(k): If you set this up by December 31st, you can make employer contributions until the tax filing deadline. Employee contributions, however, had to be made by year-end.

Nerd Note: Accountants love SEP IRAs for their simplicity. They’re easy to set up and manage, making them a great option for small business owners but they have their downsides when compared with the Solo 401(k) where you can often save more but require a few additional reporting and timeline requirements.

Health Savings Accounts (HSAs): The Triple Tax Advantage 

HSAs remain an underutilized but powerful tool for reducing taxes. If you have a High Deductible Health Plan (HDHP), you can contribute to your HSA until the tax filing deadline for the previous year. 

Eligibility and Benefits 

HSAs are available to individuals with HDHPs. Contributions are tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses aren’t taxed either. It’s a win-win-win! 

Contribution Process 

Whether you’re an employee or a business owner, you can contribute directly to your HSA even after year-end. Just make sure your accountant knows so these contributions are recorded properly. 

Nerd Note: Many people don’t realize their HSA funds can be invested! Some treat their HSA as a stealth retirement account by investing in mutual funds or ETFs.

Don’t Forget Your 529 College Savings Plans 

Did you know that some states allow you to contribute to 529 plans after December 31st and still claim a deduction for the previous year? 

State-Specific Deadlines 

The rules vary by state, so check your specific state’s deadlines and restrictions. Some states allow you to contribute up until the tax filing deadline, while others stick to the December 31st cutoff. 

Evaluating Tax Benefits 

While contributions to 529 plans aren’t deductible at the federal level, more than 35 states offer tax breaks for contributions. For example, New York residents can deduct up to $5,000 per year for single filers. 

Nerd Note: Even if your state doesn’t offer a deduction, 529 plans are still a great way to save for college education due to their tax-free growth.

Quarterly Estimated Tax Payments to Avoid Penalties 

If you’re self-employed, a freelancer, or someone who earns significant 1099 income, making quarterly estimated tax payments is crucial. 

Who Needs Quarterly Payments? 

Individuals with freelance income, large capital gains, or those doing Roth Conversions often need to make quarterly payments to avoid underpayment penalties. 

Safe Harbor Rules 

To avoid penalties, make sure to pay:

• At least 90% of your current year’s tax bill.
• Or 100% of last year’s tax liability (110% if your income exceeds $150,000).

Nerd Note: Underpayment penalties recently jumped to 8%! This makes estimating and paying your quarterly taxes on time more important than ever.

How to Prevent Future Penalties

To avoid future headaches, update your W-4 form or set funds aside for next year’s quarterly payments. Staying proactive will save you time and money. 

Getting Organized to Maximize Deductions 

Tax planning isn’t just about contributions, it’s also about documentation and organization.

Start a Filing System 

Gather essential documents like 1099s, W-2s, property tax statements, and donation receipts. Having these ready will help streamline your tax filing process. 

Standard Deduction vs. Itemizing 

Evaluate whether to itemize or take the standard deduction.

• Standard Deduction (recent years): Single filers get $15,000; married couples filing jointly can claim $30,000 (in 2025).
• Itemized Deductions include mortgage interest, state and local taxes, and charitable donations.

Nerd Note: Only about 10% of taxpayers itemize since the standard deduction now covers most smaller deductions. 

Tracking Expenses and Receipts 

Use tools or apps to track your expenses year-round. This makes itemizing easier, and ensures you don’t miss eligible deductions.

Smart Planning Today, Smoother Tax Filing Tomorrow 

Post-year-end tax planning doesn’t have to be stressful. By contributing to retirement and HSA accounts, managing quarterly payments, and staying organized, you can set yourself up for success. Smart tax planning not only reduces your tax bill but also helps you achieve greater financial security. 

If you’re unsure where to start, don’t hesitate to consult a tax professional. They can guide you through these strategies and make sure you maximize your savings. 

Remember, financial health is a marathon, not a sprint. By taking these steps, you’ll build a stronger, more tax-efficient future for yourself.