IRS releases updated tax numbers for 2026
The IRS releases updated federal income tax brackets and standard deductions for tax year 2026, which apply to returns filed in 2027.
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Don’t start the new year until you’ve saved as much as you can in taxes by 2025. Yes, there are still savings available, but you have less than 48 hours to earn them.
Below is a list of our experts’ best tips on saving taxes before you say goodbye to 2025.
Tax reduction for 2 days only
Thanks to the SECURE 2.0 Act of 2022, if you’re under age 59 1/2, you can take up to $2,500 from your retirement plan to pay for qualified long-term care insurance premiums without the 10% early withdrawal penalty.
However, this distribution is still taxed as income and must be made after December 29th. That leaves only two days to make distributions before the new year begins: Dec. 30 and 31, said Richard Pong, a certified public accountant in San Francisco.
The last and final call for these tax cuts forever
The Residential Clean Energy Credit and Energy Efficient Home Improvement Credit are only available through December 31st.
- Residential clean energy credits: If completed by the end of the year, it will cover 30% of the installation cost of certain energy items such as solar cells, small wind turbines and battery storage.
- Energy Efficient Home Improvement Credit: Homeowners can pay 30% of the cost of energy-efficient improvements such as windows, doors, insulation, and HVAC systems if they are up and running by Dec. 31.
Catch-up contributions to 401(k) plans
Individuals who are 50 years of age or older at the end of the calendar year can make annual catch-up contributions to their 401(k) plan, but must do so by December 31st.
All individuals age 50 and older, except those between the ages of 60 and 63, can contribute an additional $7,500. People between the ages of 60 and 63 can make a “super” catch-up contribution of $11,250.
Contributions to a 401(k) account are made with pre-tax dollars, effectively reducing your taxable income when tax season approaches. Instead, withdrawals are taxed.
When you save in an IRA, you can get $1,000 back by the tax filing deadline for the 2025 tax year (typically April 15).
Item creators please be generous
Non-itemizers must wait to donate until after the new year, when they can claim a cash contribution deduction of up to $1,000 for single filers and $2,000 for joint filers. All payments made in 2025 are non-deductible.
In contrast, item creators must donate generously by December 31st to make the most of their gift. Next year, only charitable contributions exceeding 0.5% of a taxpayer’s adjusted gross income will qualify for the deduction. So let’s say your AGI is $200,000. The first $1,000 of your donation is not tax deductible.
Next year, people in the top 37% tax bracket will only get a 35% tax break on all itemized deductions, not just charitable donations. This means that for a $10,000 donation, you will receive a tax benefit of $3,500 this year instead of $3,700.
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday to Friday morning.
