5 Ways to Reduce Your Taxes Before You File

Every year I hear a version of the same thing from clients: “I wish I had known about that sooner.” Usually, they’re talking about a retirement contribution they could have made, a deduction they forgot to capture, or a credit they didn’t realize they qualified for.

The good news is that “before you file” is not the same as “before December 31.” For several strategies, you still have time to act — even if you’re sitting down to prepare your 2025 return right now.

Here are five moves worth checking before you file.

1. Maximize Retirement Contributions

This is one of the most powerful last-minute levers available, especially if you’re self-employed. The contribution deadlines for retirement accounts are more flexible than most people realize.

SEP IRA: The Most Flexible Option for Self-Employed

If you have self-employment income and you don’t already have a retirement account, a SEP IRA deserves your attention right now. Here’s what makes it powerful: you can open a SEP IRA and fund it for 2025 all the way up to your tax filing deadline — including extensions. That means you have until April 15, 2026, or October 15, 2026, if you file an extension.

The contribution limit is 25% of your net self-employment income, up to a maximum of $70,000 for 2025. For a business owner who had a strong year, this can be a significant deduction.

Let me walk you through an example. Marcus runs a consulting business and had net self-employment income of $120,000 in 2025. He’s been so busy he hasn’t gotten around to setting up a retirement account. If he opens a SEP IRA before he files, he could contribute up to $27,027 for 2025 — reducing his taxable income by that same amount. At a combined federal and Minnesota state tax rate, that’s a real savings, not a deferral trick. The money stays in his account, growing for retirement. He simply gets a deduction for putting it there.

Solo 401(k): Important Timing Distinction

If you have a Solo 401(k), the rules are split:

• Employee contributions (the salary deferral portion) must have been elected and contributed by December 31, 2025. If you missed this deadline, you can’t catch up on the employee side for 2025.
• Employer contributions (the profit-sharing portion) can be made up to your filing deadline, including extensions.

If you’re unsure which deadline applies to your situation, check with a tax professional before assuming you’re out of options.

Traditional IRA: Still Available Until April 15

Traditional IRA contributions for 2025 can be made any time up to April 15, 2026. The limits are:

• Under age 50: $7,000
• Age 50 or older: $8,000

Whether these contributions are deductible depends on your income and whether you or your spouse have access to a workplace retirement plan. But if you’re eligible for the deduction, this is one of the simplest ways to reduce your 2025 tax bill before the deadline.

One thing to keep in mind: if you make a contribution between January 1 and April 15, you’ll need to designate it for the 2025 tax year when you make the deposit. Don’t assume your financial institution will know which year you intend it for.

2. Go Back Through Your Expenses

This one requires some effort, but it’s where I often see money left on the table.

Go back through your bank statements, credit card statements, and any expense records for 2025. You’re looking for legitimate business or deductible expenses that weren’t categorized correctly — or weren’t captured at all.

Here’s a practical checklist of commonly overlooked categories:

For business owners and self-employed individuals:

• Software subscriptions used for your business (project management tools, accounting software, cloud storage, professional subscriptions)
• Business meals (50% deductible when there’s a documented business purpose)
• Mileage driven for business purposes — the 2025 standard mileage rate is 70 cents per mile
• Home office expenses, if you use part of your home regularly and exclusively for business
• Professional development: courses, books, conferences, and industry memberships
• Professional fees: attorney, accountant, business coach, consultant fees paid during 2025
• Business insurance premiums
• Cell phone and internet if used for business (deduct the business-use percentage)

For individuals:

• Unreimbursed educator expenses (teachers can deduct up to $300 for out-of-pocket classroom expenses)
• Investment fees and expenses in certain situations
• Alimony paid under pre-2019 divorce agreements

The bigger picture here: disorganized records don’t just cause stress — they cost you money. This is worth doing carefully, but it does require that you have records to support what you claim. A deduction without documentation isn’t a deduction; it’s a risk.

3. Contribute to an HSA If You Qualify

If you were enrolled in a qualifying high-deductible health plan (HDHP) during 2025, you can make HSA contributions for 2025 up to April 15, 2026.

The 2025 contribution limits are:

• Self-only HDHP coverage: $4,300
• Family HDHP coverage: $8,550
• If you’re age 55 or older: Add an additional $1,000 catch-up contribution on top of the above

HSA contributions are deductible whether or not you itemize, which makes them one of the more universally accessible deductions available. The money you contribute can then be used tax-free for qualified medical expenses — and if you don’t need it for medical expenses, it keeps growing and can be withdrawn for any purpose after age 65 (at which point it functions similarly to a traditional IRA withdrawal, taxable as ordinary income).

One important qualification note: you must have been covered by a qualifying HDHP for the months you want to claim the contribution. If you had HDHP coverage for only part of 2025, your contribution limit is prorated. If you switched to non-HDHP coverage during the year, make sure you understand which months count before contributing the full-year limit.

Also, if your employer contributed to your HSA during 2025, those contributions count toward your annual limit. Check your W-2 Box 12 with code “W” to see employer contributions before calculating how much you can still add.

One more thing worth knowing: if you over-contributed to your HSA in 2025, you can fix it. Withdraw the excess contribution — plus any earnings on it — by April 15, 2026, and you’ll avoid the 6% excise tax the IRS would otherwise assess on the excess amount. If you’re not sure whether you over-contributed, your HSA administrator can usually confirm your total contributions for the year.

4. Verify Your Estimated Tax Payments

If you made quarterly estimated tax payments during 2025, it’s worth confirming they’re all accounted for before you file.

Estimated payments are applied to your tax liability when you file, but they have to be correctly reflected on your return. A missing or misapplied payment is one of those quiet errors that can result in either an unexpected balance due or a reduced refund — both of which are avoidable with a quick check.

Here’s how to verify your payments:

Check your IRS Online Account. At IRS.gov, you can log in to your account and view your payment history for 2025. This is the most direct way to confirm what the IRS has on record.

Compare to your records. Pull your bank statements and match each estimated payment to the IRS record. If you mailed a check that isn’t reflected, you’ll want to track that down before filing.

Q4 payment timing. The fourth quarter estimated payment for 2025 was due January 15, 2026. If you made that payment in January, confirm it’s in your records and will be included on your return.

If you discover a discrepancy — the IRS shows a payment that doesn’t match what you made, or is missing entirely — don’t just adjust your return to reflect what you think you paid. Contact the IRS or work with a tax professional to get the record straightened out first. Filing with incorrect payment information can trigger notices even when you did nothing wrong.

5. Check for Commonly Missed Deductions and Credits

Before you finalize your return, run through this list. These are items I see overlooked regularly, especially in years when people are filing quickly or using software without a guide walking them through each section.

Student loan interest. If you paid interest on qualified student loans in 2025, you may be able to deduct up to $2,500 — and this deduction is available even if you don’t itemize. Income limits apply: the deduction phases out for single filers and head of household with modified AGI between $85,000 and $100,000, and for married filing jointly between $170,000 and $200,000.

Energy efficiency credits. If you made qualifying energy-related improvements to your home in 2025, there are two federal credits worth checking. The Energy Efficient Home Improvement Credit (IRC §25C) offers up to $3,200 for qualifying improvements like insulation, windows, exterior doors, and heat pumps. The Residential Clean Energy Credit (IRC §25D) covers solar panels, battery storage, and similar installations. These are credits, not deductions — they reduce your tax bill dollar-for-dollar. One important note: both of these credits expired for property placed in service after December 31, 2025, as part of the One Big Beautiful Budget Act (OBBBA). That means 2025 is the last year these are available, so if you made qualifying improvements last year, make sure you’re capturing the credit on your 2025 return.

Charitable contributions. If you donated to qualified charities in 2025, make sure those are captured. Cash donations need a bank record or written acknowledgment from the organization. Non-cash donations (clothing, household goods, vehicles) require documentation of the fair market value. If you donated $250 or more to any single organization in a single contribution, you need written acknowledgment from that organization to claim the deduction.

Self-employed health insurance premiums. If you’re self-employed and paid premiums for health, dental, or long-term care insurance for yourself and your family, those premiums may be fully deductible from your income — not just as an itemized deduction, but as an above-the-line deduction that reduces your AGI. This is separate from the home office deduction and often missed.

Retirement savings credit (Saver’s Credit). If your income falls below certain thresholds and you contributed to a retirement account, you may qualify for this credit worth up to $1,000 ($2,000 if married filing jointly). For 2025, the credit phases out completely once modified AGI exceeds $39,500 for single filers (and married filing separately), $59,250 for head of household, and $79,000 for married filing jointly.

State-specific items if you’re in Minnesota. Minnesota has its own set of credits and deductions that don’t always mirror the federal return. The K-12 Education Credit and Subtraction, the Property Tax Refund (available through a separate Schedule M1PR), and the Social Security income subtraction are examples that Minnesota taxpayers sometimes miss.

A Word on Year-Round Planning

Last-minute tax savings are genuinely helpful. But the bigger win — and I say this from seeing hundreds of client situations — comes from year-round planning.

When your books are clean and your numbers are current, you’re not scrambling in March to piece together what happened 14 months ago. You’re making decisions throughout the year with full information. You know whether a retirement contribution makes sense. You’re tracking mileage in real time. You know when a quarterly payment is coming and roughly how much you’ll need.

That’s the difference between reacting to your tax bill and actually managing it.

If you’re coming out of this filing season thinking “there has to be a better way to be prepared next year,” you’re right — and that’s exactly the kind of planning conversation we do well. Whether that’s bookkeeping support to keep your records clean, quarterly check-ins to stay ahead of estimated payments, or a year-end planning call to make smart moves before December 31, there are practical options that don’t require you to be a tax expert.

Ready to Make These Moves or Get Filing Help?

If any of these strategies apply to your situation and you want help making sure they’re done correctly before you file, contact JCT Tax Solutions to schedule a consultation. We work with individuals and small business owners across Minnesota and beyond, and we’d rather help you get this right than have you leave money on the table.

You can reach us at jct.tax or email welcome@jct.tax.

The information in this post is general in nature and has not been customized for your specific tax situation. Contribution limits, income thresholds, and eligibility rules for 2025 are referenced throughout, but individual circumstances vary. For personalized advice regarding your tax return and any of the strategies covered here, please schedule a consultation with us.