The 2025 Budget Reconciliation Bill was packed with tax law changes. Some are already in effect, others activate on January 1st, 2026.
To ensure you don’t miss out on ways to reduce your tax bill for 2025, we’ve put together a list of tax-saving opportunities that disappear when the clock strikes midnight on December 31st. Let’s start with the big one:
Taxpayers who make large, charitable donations (or plan to in 2026) should consider making one large contribution in 2025 instead of smaller, separate donations in 2025 and 2026. Next year, taxpayers who itemize deductions can only deduct charitable contributions that exceed 0.5% of adjusted gross income (AGI).
Starting next year, if your AGI is $400,000, only donations above $2000 are deductible. Additionally, charitable deductions will be capped at 35% for higher earners, down from the current deduction cap of 37%.
Philanthropic taxpayers who want to maximize the benefits of charitable deductions but are undecided about where to distribute contributions should consider a donor-advised fund.
We break down the 2026 charitable deduction limits and donor-advised fund rules in detail on page 10 of our Charitable Giving Guide.
A donor-advised fund (DAF) allows taxpayers to:
If you plan to create or make contributions to a DAF at some point in 2026 or 2027, it may make sense to start the DAF and make a single, large contribution in 2025 rather than wait. The new 0.5% AGI floor and the lower 35% deduction cap for 2026 apply to DAF contributions, so a 2025 DAF contribution will lead to a larger tax benefit than contributing the same amount in 2026 or later, all else equal. A tax professional or financial planner can help you make an informed decision.
If you do not itemize deductions and simply take the standard deduction, consider postponing cash donations until next year. Starting in 2026, non-itemizers can deduct up to $1000 (single filers) or $2000 (joint filers) for cash donations to public charities. Property donations do not qualify for the deduction.
An important note: once the new charitable deduction for non-itemizers goes into effect, donations to donor-advised funds and private foundations will not be eligible for deductions by non-itemizers. If you plan to open or contribute to a DAF in 2026 or at some point in the future, consider starting your DAF or making a large contribution now so you don't lose out on the deduction.
The new bill does not include changes to QCDs. If you are 70 1/2 or older in 2025, you can donate up to $108,000 to a qualified charity directly from your IRA to satisfy required minimum distributions (RMDs). The amount donated does not count as taxable income. In 2026, the maximum QCD amount is $111,000.
Two residential clean energy credits expire at the end of this year:
Homeowners can receive a tax credit for investing in home improvements such as:
According to reporting by CNBC, households that claim the EEHIC deducted an average of $880 from their federal returns, and $5,000 for the RCEC. To receive the credit, the upgrades must be installed on or before December 31st, 2025. Learn more about how to take advantage of the clean energy tax credits before they expire.
In August, President Trump signed an executive order that allows 401(k) administrators to include alternative assets in retirement savings funds. Alternative assets may include:
Alternative investments can diversify an equity-heavy portfolio, but they come with additional risk and aren’t a good fit for everyone. Here’s an overview of The Pros and Cons of Alternative Investments, but we highly recommend consulting a wealth manager before investing.
In 2026, individuals can put up to $24,500 in a 401(k), 403(b), 457 or Thrift Savings Plan. This is a $1000 increase to the 2025 limit of $23,500.
The annual IRA contribution limit increased to $7,500 from $7,000. Individuals 50 or older can make an additional catch‑up contribution of $1,100 (up from $1,000 for 2025).
For a complete list of IRS cost of living adjustments, including phase-out ranges for Roth IRA contributions, please see the IRS news release from November 13th, 2025.
The 2025 Budget Reconciliation Bill included immediate changes to current tax law including:
Seniors with incomes of less than $75,000 (single) and $150,000 (joint) may be eligible for a bonus deduction of up to:
Also, if you purchased a new car that was assembled in the U.S. this year, you can deduct up to $10,000 per year in auto loan interest.
For an overview of the biggest tax law changes, read our summary article about the 2025 Budget Reconciliation Bill.
We recommend filing your 2025 taxes as soon as possible. The immediate changes to tax laws such as the increased SALT Deduction cap, tax deduction on tips, the higher standard deduction for seniors, among other changes means that many taxpayers will receive a larger tax refund than in years past.
Get a jumpstart on your 2025 taxes so you’re first in line for a (possibly larger than normal) refund. Questions? We’re here to help. Connect with us online or give us a call at (415) 541-7774
If you’d rather explore strategies on your own first, download our free guide: Gift-Giving Strategies for 2026.
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