7 tax-planning strategies that will save you money

‘Tis the season — tax season. While we don’t like paying them, there are many ways we can save a bit.

Here are 7 strategies to save on your taxes. Some of them are for the tax return you’ll be filing in 2025, and others are for future planning.

Recent tax law changes under the One Big Beautiful Bill Act (OBBBA) may affect whether you choose to take the standard deduction or itemize your taxes.

The standard deduction is a set dollar amount that reduces your taxable income. Itemizing might reduce it further than the standard deduction, depending on your specific financial situation.

The standard deduction increased for tax year 2025 as a result of the OBBBA.

For a single or married person filing separately, the standard deduction is $15,750 (increasing to $16,100 in 2026).
For married filing jointly or a surviving spouse, the standard deduction is $31,500 ($32,200 for 2026).
For heads of households, the standard deduction is $23,625 ($24,150 for 2026).

For most taxpayers, the standard deduction is the best option since the amounts increased dramatically in 2018. The OBBBA made those increases permanent.

“Roughly speaking, about a third of tax filers itemized deductions up to 2017, but the increase in the standard deduction reduced the number of itemizers to less than 10%,” said Joseph Rosenberg, senior fellow with the Urban-Brookings Tax Policy Center. “We estimate about 5 million more taxpayers will itemize in 2025 as a result of the new law, so that’s still not a huge proportion of tax filers.”

Rosenberg said there is no magical way to figure out whether itemizing or the standard deduction makes the most sense to you.

“You can get a pretty good sense if you total up your itemized deductions and see whether or not they exceed the standard deduction,” Rosenberg said.

Read more: Standard deduction vs. itemize: How to decide which tax filing approach is right

The OBBBA created a new deduction for seniors, beginning with the 2025 return. Taxpayers 65 and older can claim an additional deduction of $6,000 on top of itemized deductions or the standard deduction. It applies per person, so if both people in a marriage are 65 or older, the total deduction is $12,000.

The deduction phases out if your income is more than $75,000 as an individual or $150,000 for married filing jointly.

To qualify, you must be 65 on or before the last day of the tax year.

The OBBBA increased the amount of state and local taxes you can deduct on your federal return from $10,000 to $40,000, which might make itemizing taxes worthwhile for more people.

These taxes include the state and local taxes your employer withholds during the year, as well as state and local property taxes.

“There may be some people that were taking the standard deduction last year because they could only claim $10,000 in state and local taxes. Now that they can claim up to $40,000, that might flip them,” Rosenberg said.

Starting with the 2025 tax year and lasting through 2028, certain workers can deduct income from tips.

If you work in a job where you regularly receive tips and the IRS says it qualifies, you can deduct up to $25,000 in tips. The deduction phases out if you earn more than $150,000.

“This will probably be a little bit of a source of confusion for folks because information is sort of still coming out about who is eligible and how those deductions will work,” Rosenberg said. “But largely, people that have a job where they get tipped income, usually that is separately reported on their W-2, they’re potentially eligible for the new deduction on tipped income.”

Similar deductions apply for overtime; both itemizers and those who take the standard deduction are eligible.

Read more: Are tips taxable? Here’s how the new ‘no tax on tips’ deduction works.

It’s too late for 2025, but if you like to donate to charities, something is changing for tax year 2026 that might interest you.

Even if you take the standard deduction, you can deduct $1,000 in charitable donations per person beginning with the 2026 tax year. That was part of the OBBBA. You might remember something similar happened during the COVID pandemic with a $300 deduction.

Rosenberg said this is good for people who take the standard deduction but want to get a little benefit in return for making a charitable donation.

Read more: Charitable contribution deduction: What you need to know for 2025-2026 taxes

If you have had a good year in the stock market and sell at a profit, you’ll likely owe capital gains taxes. Losses elsewhere in your investment portfolio can help offset some of those gains.

But as you can imagine, there are limits. You can claim the lesser of $3,000 for a single filer or the total net loss. Don’t fret about this limit if you lost more because you can carry the loss forward into future tax years.

The deadline is Dec. 31 of the tax year, so plan ahead now to avoid a bigger 2026 tax bill.

Read more: Tax-loss harvesting: What it is and how it works

If you’re enrolled in a high-deductible health plan, you can contribute to a health savings account, or HSA.

This contribution is made with pre-tax dollars, which reduces your taxable income. You can claim a deduction for an HSA contribution even if you don’t itemize your taxes.

One note: You can’t contribute to an HSA if you’re on Medicare.

The money in an HSA grows tax-free, and if they meet certain conditions, distributions can be tax-free.

You can contribute to an HSA if your annual deductible is $1,650 for an individual or $3,300 for a family or more. There are also upper limits to out-of-pocket maximums.

For an individual, the annual contribution limit is $4,300, and $8,550 for a family. For people 55 or older, you can contribute an extra $1,000.

Rosenberg advised that if you’re eligible to contribute to an HSA, it’s a good tax strategy. And it’s not too late to reap the benefits on your 2025 taxes. You can contribute to the account until April 15, 2026, and have it count for the 2025 tax year.

Read more: HSA rules and benefits: Here’s how much you can save

Each year, you can contribute to your retirement accounts and get some tax benefits.

For a 401(k), in 2025 the contribution limit was $23,500, and it increases to $24,500 for 2026. That same limit applies to 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan. For people aged 50 and older, there is a catch-up contribution option, which allows you to contribute more.

For many employer-sponsored plans, it’s too late to reap 2025 tax benefits, but you can still contribute to a traditional IRA.

“If you’ve ever used tax preparation software, they always say, ‘hey, you could get a deduction if you still do this,’” Rosenberg said about contributing to your IRA. “It’s one thing up until the filing deadline that people can still do.”

That means you can put money in your IRA until April 15, 2026, and get the deduction on your 2025 taxes. The limits for an IRA contribution are $7,000 for 2025 and $7,500 for 2026.

The more you contribute to an eligible account, the more you can reduce your taxable income.

If you have a solo 401(k), you can make a contribution up until the tax filing deadline.

Read more: 401(k) vs. IRA: The differences and how to choose which is right for you