Year-End Tax Planning Moves for High-Income Earners and Business Owners

By D. Christopher Winans, EA

Many people think tax planning only happens at the start of the year. While it’s never a bad idea to start the year with a detailed tax plan, I often recommend that high-income earners take a final look at tax deductions and other strategies as the year comes to a close.

Reviewing your income, deductions, and retirement contributions now can open up opportunities to reduce your tax bill before December 31. While every situation is different, if you’re a high-income earner looking to sharpen your tax plan, you might consider exploring these year-end tax planning opportunities.

Last-Minute Deductions and Deferrals

If you have a traditional IRA, your contributions are tax-deductible up to the limit. If you are under age 50, the limit is $7,000; for those 50 or older, the limit increases to $8,000. Similarly, contributions to your health savings account (HSA) are also usually tax-deductible.

You don’t have to rush to make these contributions immediately. Generally speaking, you have until the filing deadline to do so.

If you have a cash-based business, you may be able to reduce this year’s taxable income by paying next year’s expenses ahead of time and deferring income by waiting to invoice clients until the new year. Depending on the amount of income you’re able to defer, this strategy may result in considerable tax savings.

Strategic Charitable Giving and Retirement Contributions

If you’re a high-income earner, incorporating charitable giving into your tax planning allows you to support important causes while also lowering your tax bill. These are some of the strategies my clients consider:

• Donating appreciated stocks instead of cash

• “Bunching” multiple years’ worth of donations into one year

• Opening a donor-advised fund for an immediate deduction

• Creating a charitable remainder trust (CRT)

• Creating a charitable lead trust (CLT)

Many of my clients also choose to max out their retirement plan contributions. If you have a 401(k) through an employer, you can contribute up to $23,500.

However, the IRS allows you to make catch-up contributions if you’re older. If you are age 50 or above, you may contribute an additional $7,500 to your 401(k). If you are 60 to 63, you’re eligible to make a “super catch-up” contribution of an additional $11,250.

Note: Beginning in 2026, employees earning more than $145,000 in W-2 wages will be required to make all 401(k), 403(b), and governmental 457(b) catch-up contributions as Roth. This applies to both the standard $7,500 age-50 catch-up and the $11,250 “super catch-up” available for ages 60–63.

Final Review of Entity Structure and Compensation

The structure of your business has a significant impact on your total tax bill. However, many business owners don’t revisit their company’s structure often enough. As your business grows and changes, you might find that a different structure would be more beneficial from a tax standpoint.

For example, suppose you started a relatively small LLC a few years ago. Your business has grown considerably over the past year, and you’re now looking for a way to save on your self-employment taxes. In this situation, it might make sense to switch to an S corporation.

Conducting this review can be a lengthy process, and it’s always important to weigh the pros and cons of both sides. When I work with clients, I take the time to carefully examine their company’s current structure and recommend whether to make a change.

Looking for Tax Planning Guidance?

At Fidelis Tax & Accounting, we believe in the power of proactive tax planning. Handling your taxes isn’t a one-time effort; we start with a plan and fine-tune it throughout the year to keep your tax liability to a minimum. Like any other financial plan, an effective tax plan evolves with you.

If you have ideas for last-minute tax deductions or are just hoping for some tax planning guidance, contact us today.

We are here to assist. Contact us by phone, email, or via our social media channels.

• Schedule a consultation to discuss your tax planning strategy.

• Contact us to see how proactive planning can reduce your tax burden this year.

• Learn more about how Fidelis partners with clients to meet their tax and accounting needs.

About Christopher

D. Christopher Winans is the President and Founder of Fidelis Tax & Accounting, a proactive, advisory-driven accounting firm based in Annapolis, Maryland, serving clients across 45 states. A licensed Enrolled Agent, Chris is authorized to represent clients before the IRS and state tax authorities nationwide. His career path (from the medical and law enforcement fields to financial planning and taxation) gave him a unique perspective on problem-solving and the importance of planning ahead. When he discovered the need for more proactive, strategy-based tax support, he pursued his EA designation and launched Fidelis to fill that gap.

Since founding Fidelis in 2016, Chris and his team have built a national practice rooted in integrity, open communication, and personalized service. The firm offers a full suite of tax and accounting services, with a strong emphasis on customized tax strategy, ongoing planning, and client education.

Outside the office, Chris enjoys spending time with his wife, Courtney, and their daughter, Parker. The family is actively involved in Bay Area Community Church and Arnold Christian Academy, where they value community, faith, and service. To learn more about Christopher, connect with him on LinkedIn.