Ways To Cut Tax Costs For 2025 And Boost Savings For 2026

A tax expert might help you pinpoint eligible deductions and credits you might have missed, potentially lowering your tax bill.

Fewer things are more satisfying than cutting taxes owed for 2025 and building savings by diminishing some of those charges in 2026.

Both of those endeavors are achievable if you consider making numerous strategic moves.

You can potentially cut costs by thousands of dollars by shrinking your taxable income and using tax credits. However, you should act fast, as many exemptions are just good for this tax year and expire on Dec. 31. Plus, new tax legislation that recently passed includes a batch of sizeable tax breaks, including some retroactive to Jan. 1, 2026.

Those elements make tax planning this year even more important. The IRS tax deadline for filing 2025 individual returns for most people is April 15, 2026. Filing early can be advantageous, as you might get a quicker refund if you’re due one or gain extra time to pay owed taxes.

Though it might be an extra expense to have a tax expert review your taxes, it might be worth it to help identify all the qualifying deductions and credits you might have missed. It can provide guidance to meet your specific case. Based on research, here are ways to help cut your tax bill.

Exhaust your retirement contributions

This can help you now by saving you money on your tax bill. Given that most retirement accounts are tax-advantaged, they can offer tax benefits for contributing. For the 2025 tax year, you can give up to $23,500 in total combined traditional and Roth contributions. If you’re 50 or over, you can make extra catch-up contributions of $7,500. If you’re ages 60 and 63 and your employer permits it, you can contribute up to $11,250 in catch-up contributions instead of the standard $7,500 catch-up. If you just make traditional contributions, they will cut your taxable income dollar for dollar.

Tap into new tax loopholes for multiple breaks

Under the One Big Beautiful Bill Act, passed earlier this year, several deductions are available to eligible individuals. For instance, there is a $6,000 bonus deduction for those 65 or older. Another break: If you acquired a qualifying vehicle, up to $10,000 of auto loan interest is deductible. It does not apply if income reaches $100,000 for single filers or $200,000 for joint filers. And workers can claim tax exemption on a certain amount of qualified tips and overtime pay. Get more details here.

Use an HSA To Help Decrease Taxes

Called a Health Savings Account (HSA), this plan can reduce your federal tax income. For instance, you can contribute up to $4,300 for yourself and $8,550 for your family to an HSA-eligible high-deductible health plan. Money can be used for medical bills tax-free, and contributions are made on a pre-tax basis.

Consider deferring income

This strategy could be beneficial, particularly if you’re a freelancer or gig worker. If able, consider not billing those you are working for by deferring income from this year until next year. This can cut the current year’s taxable income and let you hold off paying taxes on the deferred income.

Initiate A Retirement Plan For Self-Employment Income

This is a retirement plan to examine, particularly if you are a business owner or gig worker, as it can lessen your taxable income. If you don’t have a retirement plan, you can perhaps still establish one, but you should do so quickly. Cutoff dates for setting up a plan and financing could depend on how your business is organized, so you should contact a tax expert promptly.

With the new year approaching, be open-minded to strategies that can help you put more money in your pocket in 2026. For example, you might be able to secure credit for a home mortgage and a share of home property taxes. Check with a tax advisor for more details.

Filing your taxes by the deadline to avoid late fees, increasing retirement account contributions, and adding to 529 college savings plans are among other ways to boost savings. Check out this and other sites that offer ways to help cut tax costs, create savings, and possibly elevate your finances.