As 2025 draws to a close, several key tax provisions under the One Big Beautiful Bill Act (OBBBA) offer opportunities for taxpayers, if they act before Jan. 1, 2026. These updates affect both individuals and business owners – impacting deductions, energy credits, charitable giving, and business entity planning. Acting before year-end can help you maximize deductions, capture valuable credits, and position yourself for a smooth transition into 2026. Below are eight important tax-related actions to consider by Dec. 31, 2025.
Capture Maximum Deductions
Consider accelerating qualifying purchases and deducting the full cost under Section 179 or the bonus depreciation rules. If you own your own business, taking advantage of the higher deduction on qualified business property by accelerating decisions to purchase equipment that you also put into use before the end of this year can immediately lower your tax burden.
Residential Clean Energy Credit (Section 25D)
This 30% credit for renewable energy property, such as residential solar panels, was originally set to last through 2034. It will now expire on Dec. 31, 2025. The equipment must be installed and operational by year-end to qualify for the credit.
Energy Efficient Home Improvement Credit (Section 25C)
The annual credit of up to $3,200 for efficiency upgrades, including heat pumps and insulation, expires on Dec. 31, 2025.
Gift Exclusion
In 2025, the annual gift exclusion is $19,000. This amount is tax-free per person per year, and married couples can gift up to $38,000 to an individual each year. Taxpayers who may be subject to estate tax and who have not used their annual gift exclusion in 2025 should consider using it before year-end.
Maximize Your Planned Giving Before 2026 Rule Changes:
Starting in 2026, itemizers may only deduct charitable contributions to the extent that they exceed 0.5% of their adjusted gross income, thus limiting the amount of gifts eligible for a deduction. Additionally, for those in the top 37% tax bracket, the benefit from all itemized deductions, including charitable donations, will be capped at 35%. If you are considering making substantial charitable gifts, you will accelerate your deduction and increase the amount by completing these donations in 2025.
Bunching
A straightforward tax strategy known as “bunching” or “bundling” allows taxpayers who typically take the standard deduction to benefit from itemized deductions such as charitable deductions. By combining several years’ worth of charitable contributions into a single tax year, your total itemized deductions can surpass the standard deduction. This approach requires some planning and sometimes warrants consideration of using a donor-advised fund (DAF). It’s not too late to open a DAF in 2025.
Tax-loss Harvesting
Reduce or eliminate capital gains taxes by harvesting currently unrealized capital losses to offset gains recognized during 2025 of an equal value. When you have more capital losses than gains, you can offset up to $3,000 of ordinary income and carry excess amounts to future tax years. You can also consider harvesting capital gains to absorb your excess capital losses sooner. If you are harvesting losses, always consider the impact of the wash sales rules, which can eliminate the loss if you replace the security you sold with the same or a substantially similar security within 30 days before or after the loss sale. Consult an investment advisor before implementing your loss harvesting strategy.
SALT Deductions
The OBBBA increased the maximum itemized deduction for state and local property and income or sales taxes from $10,000 to $40,000 for both single filers and married taxpayers filing a joint return. Individuals who have state tax payments due in early 2026 may want to consider accelerating them into 2025.
Interested in learning more? Please contact your CBIZ tax professional for more information.
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