3 Year-End Planning Steps to Trim Your 2025 Taxes

With major changes from the One Big Beautiful Bill Act (OBBBA) taking effect, now is the time to review strategies that may reduce your 2025 tax liability.

1. Reevaluate the Standard Deduction

For 2025, the standard deduction increases to:

$15,750 (Single/MFS)

$23,625 (Head of Household)

$31,500 (Married Filing Jointly)

Add-ons apply for taxpayers 65+ or blind.

However, expanded deductions—especially the SALT deduction—may make itemizing more beneficial again. You may want to accelerate expenses like medical costs above 7.5% of AGI or eligible mortgage interest into 2025. High earners may especially benefit before itemized deductions become slightly less valuable in 2026.

2. Maximize the Expanded SALT Deduction

For 2025–2029, the SALT cap increases to:

$40,000 (single/joint)

$20,000 (separate filers)

These benefits phase out at higher income levels and drop back to the $10,000 cap beginning in 2030.

If your SALT expenses exceed the old cap but itemizing still falls short of the standard deduction, consider bunching—for example, paying 2026 property taxes or state estimated taxes before year-end to make itemizing worthwhile in 2025.

3. Manage Your MAGI

Several OBBBA benefits depend on your modified adjusted gross income (MAGI), including:

The new $6,000 senior deduction (phases out above $75,000 single / $150,000 joint)

Enhanced SALT deduction

Child Tax Credit

Temporary deductions for tips, overtime, and auto loan interest

Net investment income tax exposure

Ways to reduce MAGI include maximizing retirement and HSA contributions, spreading Roth conversions over multiple years, and using qualified charitable distributions (QCDs) if you’re age 70½+.

Need Help?

ECS Financial Services can review your year-end options and help you determine the most tax-efficient moves for 2025.