12/30/25 Newsletter

Happy early New Year from TaxStache! 🎉

As we close out 2025, we wanted to send you a special edition of the newsletter to help you hit the ground running in 2026. While champagne and confetti are great, starting the year without a tax headache is arguably even better.

We know tax laws have shifted significantly this year (looking at you, One Big Beautiful Bill Act), and whether you’re a W-2 employee, a side-hustler, or a real estate mogul, there are moves you can make right now to save money and stress.

PS: If you think a friend would enjoy this list, please forward it along!

📅 The "Do It Before December 31" Checklist

Action items that firmly expire when the ball drops.

• Maximize 401(k) Contributions: You have until Dec. 31 to hit your $23,500 limit ($31,000 if age 50+).

• Harvest Investment Losses: Sell underperforming non-retirement investments to offset capital gains. You can deduct up to $3,000 of excess loss against ordinary income.

• Take Required Minimum Distributions (RMDs): If you are age 73+, you must take your RMDs from traditional IRAs and 401(k)s by Dec. 31 to avoid a hefty 25 percent penalty.

• Complete Charitable Giving:

  • Make cash donations by Dec. 31 to qualify for the 2025 deduction.

  • Consider "bunching" donations into a Donor Advised Fund (DAF) if you are on the edge of itemizing.

  • Note: The SALT cap has been raised to $40,000, making itemizing attractive for far more people this year.

• Spend FSA Funds: Check your Flexible Spending Account balance. While some plans offer a grace period or rollover, many are "use it or lose it" by Dec. 31.

• Buy That Car (If It's American-Made): The new legislation allows for a deduction on auto loan interest for US-assembled vehicles purchased for personal use. If you're on the fence, buying before year-end locks this in for the 2025 tax year.

• 529 Plan Contributions: Many states require contributions be made by Dec. 31 to claim a state income tax deduction or credit for 2025.

👷 For the W-2 & "9-to-5" Crowd

Standard employment, but with new perks.

• Track Your Overtime: Under the new law, qualified overtime pay (the "time-and-a-half" portion) is now deductible up to $12,500 ($25,000 joint). Ensure your final paystubs clearly itemize this.

• Verify Name & Address: Notify your employer immediately if you moved or changed your name in 2025 so your W-2 arrives correctly.

• Update W-4: Did you get married, have a baby, or start a side hustle? Submitting a new W-4 now prevents a surprise tax bill next April.

🚗 For the Gig Economy & Service Industry

Contractors, servers, drivers, and freelancers.

• Log Your Tips Separately: "No Tax on Tips" is in effect for 2025 (up to $25,000). You must have accurate logs distinguishing voluntary tips from mandatory service charges to claim this deduction.

• Clean Up Expense Categories:

  • Use apps like Neat or QuickBooks to scan stray receipts now.

  • Specifically categorize "Business Meals" vs. "Entertainment" (meals are generally 50 percent deductible; entertainment is often 0 percent).

• Establish a Solo 401(k): You must establish the plan by Dec. 31 to make contributions for 2025, though you have until tax time to actually fund it.

• Purchase Needed Equipment: Need a new laptop or camera? Buying it before Dec. 31 allows you to take the deduction in the 2025 tax year.

🏢 For Business Owners

Small business, LLCs, and S-Corps.

• Run Final Payroll: Ensure all bonuses and third-party sick pay are recorded.

• Prepare 1099-NECs: Verify W-9s for all contractors you paid $600+ this year. You will need to file these by Jan. 31.

• Account for 100% Bonus Depreciation: This was made permanent in July! If you bought machinery, vehicles, or software in 2025, you can likely write off the entire cost this year.

• Hold Your Annual Meeting: If you are an LLC or Corp, hold your annual meeting and record minutes before Dec. 31 to maintain your corporate veil.

🏠 For Real Estate Investors

Landlords and property moguls.

• Close on "Placed in Service" Dates: To claim depreciation for 2025, the property must be ready and available for rent by Dec. 31.

• Prepay Property Taxes: You can prepay 2026 property taxes before Dec. 31 to deduct them on your 2025 return (up to the $40,000 SALT cap).

• Review Repair vs. Improvement: Categorize expenses carefully. "Repairs" (fixing a leak) are deductible immediately; "improvements" (new roof) must be depreciated over time.

📂 The "Get Organized" List (For Jan - April)

Things to do once the calendar turns.

• Create a "Tax 2025" Folder: Physical or digital (Google Drive/Dropbox). Do this today so you have a place to throw forms as they arrive in January.

• Watch for the New Forms:

  • 1099-K: For Venmo/PayPal transactions over $20,000 in more than 200 transactions

  • Form 1098-T: If you paid college tuition.

  • Crypto/Digital Asset Reports: Exchanges are tightening reporting; ensure you have your transaction history for every trade.

• Schedule Your Appointment: Tax pros are booking up fast due to the new complexities of the OBBBA legislation. Book your slot for February or March now.

We hope this list helps you feel a little lighter heading into the New Year!

Share the ‘Stache

Share TaxStache with your friends. Get TaxSwag that may or may not be tax-deductible.

We’ll give you free stuff. You’ll give your friends peace of mind. Everybody wins (except the IRS).

Your Referral Count: 0

Or copy your personal referral link and share it with friends:

https://taxstache.beehiiv.com/subscribe?ref=PLACEHOLDER