5 Smart Moves to Make Before Tax Day

With Tax Day fast approaching, now is the time to ensure your financial house is in order. Whether you’re looking to lower your tax bill, boost your savings, or simply stay compliant, these five steps can help you make the most of tax season before the deadline.

1. Maximize Your Retirement Contributions

One of the best ways to reduce your taxable income is by contributing to tax-advantaged retirement accounts. There’s still time if you haven’t reached your contribution limits for your 401(k), IRA, or SEP IRA.

• Traditional and Roth IRAs: You have until April 15, 2025, to contribute for the 2024 tax year.
• Employer-sponsored plans (e.g., 401(k)): Check if you can contribute more before your employer’s deadline.
• Self-employed? Consider contributing to an SEP IRA or Solo 401(k) to maximize your savings and deductions.

2. Take Advantage of Tax-Loss Harvesting for 2025

If you experience investment losses, you might be able to use tax-loss harvesting to offset capital gains and reduce your taxable income for your 2025 tax year.

Here’s how tax-loss harvesting works (you can also watch our video on YouTube):

• Sell underperforming investments to realize a loss.
• Use these losses to offset taxable capital gains.
• If your losses exceed your gains, you can deduct up to $3,000 from your ordinary income and carry over the remaining losses to future years.

Before making any moves, consult with a financial advisor to ensure this aligns with your overall investment strategy.

3. Think Ahead: Make Charitable Contributions Throughout the Year

Donating to qualified nonprofit organizations throughout the year can lower your taxable income while supporting causes you care about. You can contribute:

• Cash donations (may be tax-deductible if you itemize).
• Appreciated assets like stocks can help you avoid capital gains taxes while providing a deduction.
• Donor-advised funds (DAFs) allow you to contribute now and distribute funds over time.

If you plan to deduct charitable donations, obtain proper documentation to substantiate your claims, and make the donations before December 31 of the current tax year.

4. Watch Out for Tax Scams and Identity Theft

Tax season is prime time for scammers looking to take advantage of unsuspecting taxpayers. Be on alert for these common tactics:

• “Too good to be true” refunds or credits: Beware of misleading social media advice encouraging you to claim false deductions or credits. If it sounds too good to be true, it probably is.
• Threats or demands for immediate payment: Scammers posing as IRS agents may demand payment under the threat of arrest or deportation. The IRS will never call, email, or text to demand immediate payment.
• Fake IRS websites: Always navigate directly to IRS.gov—scammers create lookalike sites with misspellings or odd web addresses to steal your information.
• Tax-related identity theft: If someone steals your Social Security number to file a fraudulent return, you may face delays in receiving your legitimate refund. If you suspect identity theft, continue to file your return and report the issue to the IRS.

For the latest alerts on tax scams, visit the IRS’s Identity Theft Central page.

5. Review Your Withholdings & Get Organized

If you ended up with a large tax bill or significant refund last year, it may be time to adjust your withholdings. Properly setting your withholdings can help ensure you’re not overpaying throughout the year or stuck with an unexpected bill in 2026.

Also, take time to gather and organize essential documents like:
✅ W-2s and 1099s (income statements)
✅ Investment and brokerage statements
✅ Mortgage interest and property tax records
✅ Receipts for deductible expenses (charitable donations, medical costs, business expenses)

If you’ve had major life changes (marriage, home purchase, career shift), working with a financial professional can help optimize your tax situation.

Final Thoughts: Stay Ahead of Tax Day

A little preparation now can save you time, money, and stress before the April 15 deadline. Whether you maximize deductions, protect yourself from scams, or make smart investment moves, these steps can strengthen your financial position.

At Mission Wealth, we’re here to help you navigate every tax season and plan for the year ahead. If you have questions or need guidance, schedule a consultation below, and let’s ensure you’re on the right track.