6 Smart Tax Moves to Make Before Filing Your Taxes

Tax season is fast approaching, and if you’re aiming to reduce your obligation to Uncle Sam in 2025, now is the time to get informed and take action. In our latest A Wealth of Knowledge podcast, we explore “6 Smart Tax Moves to Make Before Filing Your Taxes.” Hosted by  Joseph Eschleman, CIMA® President of Towerpoint Wealth, along with Associate Wealth Advisor Megan M. Miller, EA, and Steve Pitchford, CPA, CFP® Director of Tax and Financial Planning, the three dive into these six smart tax moves that can make a significant economic difference to your bottom line, both before and after you file your 2024 tax return. Whether you’re an individual taxpayer, part of a family unit, or a business owner, this episode offers actionable insights to help you navigate potential changes in tax laws, maximize your tax savings, and secure a stronger financial future. Listen to it below.

Understanding the New Tax Landscape

One of the central themes of the episode was the critical importance of preparing early. With potential shifts in tax brackets, deductions, and exemptions on the horizon, waiting until the last minute could leave you scrambling, and making last-minute decisions. The conversation emphasized that proactive planning is not just about saving money — it’s about staying ahead of changes that could impact your overall tax, retirement, and financial strategy.

In 2025, you might witness the expiration of certain provisions from the Tax Cuts and Jobs Act (TCJA), which could lead to significant changes in the way your income is taxed. For instance, as some deductions phase out and tax brackets shift, taking steps now can help mitigate surprises down the road. The experts stressed that understanding these changes and acting in advance could make a substantial difference in your tax outcome.

Six Smart Tax Moves to Consider

The episode broke down six key strategies designed to optimize your tax situation:

1. Maximize Retirement Account Contributions

One of the simplest yet most effective strategies discussed is maximizing contributions to pre-tax and tax-advantaged retirement accounts. By contributing to your 401(k), 403(b), 457, IRA, or SEP-IRA, you can lower your taxable income, which in turn reduces your overall tax liability. For 2024, the contribution limits stand at $23,000 for 401(k) plans and $7,000 for IRAs—with even higher limits for those over the age of 50, through what are known as “catch-up contributions.”

Not only does maxing out your retirement contributions provide immediate tax benefits, but it also bolsters your long-term financial security and nest egg. The hosts explained that if you contribute the maximum to a traditional 401(k), you could reduce your taxable income by thousands of dollars, setting you up for both shorter-term tax savings and longer-term net worth growth.

2. Consider Roth IRA Conversions

Roth IRA conversions have become a popular tool among savvy investors, and for good reason. The process involves converting a portion of your Traditional IRA into a Roth IRA, allowing you to lock in today’s historically low federal tax rates, while then having funds for future tax-free withdrawals. This strategy is particularly beneficial for those who anticipate being in a higher tax bracket during retirement.

However, the conversion does come with an upfront tax cost. The key is to balance the immediate tax hit against the long-term benefits of tax-free withdrawals that Roth IRAs provide. Joe, Megan, and Steve discussed how a phased, partial conversion over several years can help manage this cost, making it a strategic move rather than a financial burden.

3. Utilize Tax-Loss Harvesting

For those who invest in the stock market, tax-loss harvesting can be a game changer. This strategy involves selling underperforming assets to offset capital gains, thereby reducing your overall tax bill. The episode highlighted that, after you first offset all of your capital gains, you can also then deduct up to $3,000 of losses from your ordinary income annually, with any excess losses allowed to then be carried forward to subsequent years.

Tax-loss harvesting works best in volatile markets or when you’re rebalancing your portfolio. The experts also emphasized the importance of adhering to the Wash Sale Rule, which prevents repurchasing the same asset within 30 days and nullifies the tax benefit. With careful planning, investors can turn market dips into valuable tax-saving opportunities.

4. Review Charitable Contributions

Charitable giving not only benefits the community, but can also be a smart tax strategy. Donations to qualified charities are tax-deductible if you itemize your deductions. In the podcast, the hosts explored various ways to make charitable contributions more tax-efficient. For instance, using Donor-Advised Funds (DAFs) allows you to make a lump-sum donation in one year while distributing the funds over time.

Another strategy discussed was donating appreciated stocks instead of cash. This move can help you avoid capital gains taxes while still benefiting from the charitable deduction. For those near the standard deduction threshold, bunching multiple years worth of donations into one tax year can provide a substantial tax benefit.

5. Plan for Potential Changes in Deductions

Many taxpayers automatically opt for the standard deduction, but the episode encouraged listeners to consider whether itemizing might yield greater benefits. Major deductions to keep an eye on include mortgage interest, medical expenses, and state and local taxes (SALT). With the SALT deduction cap of $10,000 set to expire at the end of 2025, individuals in high-tax states could see significant changes in their tax liability.

The hosts advised that tracking deductible expenses meticulously and employing a bunching strategy—such as prepaying medical bills or property taxes—could help maximize deductions for a particular tax year. In these cases, consulting with a tax professional is essential to determine whether itemizing or taking the standard deduction is the most beneficial approach for your situation.

6. Evaluate Estate Planning Strategies

Estate planning is often overlooked until it’s too late, but with changes in estate tax laws looming, high-net-worth individuals should take action now. Currently, the federal estate tax exemption stands at $13.99 million per individual (or $27.98 million per couple), but this exemption is slated for reduction at the end of 2025 unless the TCJA is extended.

The podcast delved into strategies such as using the Annual Gift Exclusion—which allows you to gift up to $18,000 per person (in 2024)—to reduce the size of your taxable estate. Additionally, regularly reviewing your trusts and estate plans with a qualified attorney can ensure that your assets are protected and aligned with evolving tax laws.

Actionable Insights and Next Steps

Each of these strategies offers a distinct pathway to tax savings, but the common thread is the need for early and proactive planning. As discussed in the episode, waiting until tax season to make these moves can result in missed opportunities and potential financial setbacks. Instead, start planning now to capitalize on the current tax landscape and prepare for future changes.

Listeners are encouraged to consider taking the following actionable steps:

• Review your retirement account contributions: Ensure you’re contributing the maximum amount allowable, and consider catch-up contributions if you’re over 50.
• Explore the possibility of a Roth conversion: Evaluate your current tax bracket and future financial needs to determine if this strategy suits your goals.
• Consider your investment portfolio: Look for opportunities to harvest losses and offset capital gains, while staying mindful of the Wash Sale Rule.
• Plan your charitable giving: Think strategically about your donations, and consider bunching them or using Donor-Advised Funds to maximize your tax benefits.
• Monitor potential changes in deductions: Keep track of deductible expenses and consult a tax professional to decide whether itemizing or taking the standard deduction is best for you.
• Revisit your estate planning: If you’re in a high-net-worth bracket, now is the time to review and potentially adjust your estate planning strategies.

Secure Your Financial Future

At Towerpoint Wealth, we believe that sound wealth management and financial planning and coordination go hand in hand with tax efficiency. The strategies discussed in our “Tax Season Strategies for 2025” episode are just the beginning. Whether you’re fine-tuning your retirement contributions, considering a Roth conversion, or reevaluating your estate plan, our team of experts is here to help you navigate these complex decisions.

If you’re ready to take the next step towards a more secure and coordinated financial future, contact us today. Our team is dedicated to helping you implement the right strategies tailored to your unique circumstances, ensuring that you not only meet your tax obligations but also set the stage for long-term financial success.

Don’t wait until tax season to act. Reach out now to schedule your personalized consultation and start crafting a financial strategy that works for you. Visit our website or email us directly to begin a dialogue, and discover how Towerpoint Wealth can make a difference in your financial journey and security. By taking these proactive steps today, you’ll be better prepared for the changes ahead and well-positioned to maximize your tax savings in 2025 and beyond. Your financial future is too important to leave to chance—let’s work together to build a strategy that secures your wealth and peace of mind. Contact us today and take control of your financial destiny.