Four Tax Planning Moves You Can Still Make for 2025 Taxes
It's January. The new year confetti has been swept up. Your 2025 taxes? Those feel pretty locked in by now.
Except they're not.
Most tax planning does happen before December 31st. But "most" doesn't mean "all." There are still a handful of meaningful moves you can make between now and when you file 2025 taxes - and some of them have deadlines stretching into September or October if you file an extension.
Let's walk through four levers you can still pull.
1. IRA and HSA Contributions (Deadline: April 15th)
You have until the April tax filing deadline to make IRA and HSA contributions that count for 2025.
For IRAs, that's $7,000 (for 2025) if you're under 50, or $8,000 if you're 50 or older. For HSAs, it's $4,300 for individual coverage or $8,550 for family coverage (plus a $1,000 catch-up if you're 55+).
Now, here's where it gets a little more complicated for most optometrists.
If you have access to a retirement plan at work - or your spouse does - you're probably not getting a deduction for traditional IRA contributions once you hit certain income levels. That means you're likely looking at Roth IRA contributions instead.
Yes, it's true Roth contributions don't impact current taxes, but you're building after-tax wealth for the future.
But Roth IRAs have income limits too. Single filers phase out around $150-165K. Joint filers phase out around $236-246K.
If you're over those thresholds, you can still use the "backdoor Roth IRA" strategy. It's a two-step process: make a non-deductible contribution to a traditional IRA, then immediately convert it to a Roth IRA. Done right, it gets you the same result with a few extra steps.
One big thing to watch: the pro-rata rule. If you have other pre-tax IRA dollars sitting around (traditional IRA, SEP IRA, SIMPLE IRA), the IRS treats all your IRAs as one big bucket when you do that conversion. That can create unexpected taxable income.
One option? Roll those pre-tax IRA dollars into a 401(k) if your plan allows it. Talk to your advisor about what makes sense.
And one weird filing quirk: if you're doing a backdoor Roth now in 2026, the contribution shows up on your 2025 tax return, but the conversion won't show up until your 2026 return (filed in 2027). Your tax pro will sort it out - just make sure they know what you did and when. And check form 8606 on your tax return, where all this activity is recorded.
2. 529 Contributions (If Your State Gives You a Tax Break)
This one's smaller, but still useful if you're contributing to 529 plans for your kids.
Some states give you a tax deduction or credit for 529 contributions. The rules vary - some states require you to use their plan, others let you use any state's plan. And many allow contributions up until the April filing deadline to count for the prior year.
Check with your state's plan or your tax preparer to see what applies to you.
3. Profit Sharing Contributions (For Practice Owners)
Now we're getting into the bigger levers.
If you own a practice with a 401(k) plan, you can make profit-sharing contributions up until your business tax filing deadline - including extensions.
That's April 15th for sole proprietors, March for partnerships and S corps (though most practices are S corps), and it includes extensions. So if you extend your business return, you could have until September or even October.
Profit sharing is the third layer of your 401(k): employee deferrals, employer match, and then profit sharing on top. Since the max amount you can put into a 401(k) plan for 2025 is $70,000 across all those layers (not counting catch-ups for 50+), there may be ~$30-40,000 of room left to contribute.
For most owners, the main goal of the plan is to be a tax and retirement planning tool. That being the case, the goal is often to skew those contributions toward the owners rather than spreading them evenly across the whole team.
But does profit sharing always make sense? Not necessarily.
You need to look at a few things:
First, what does the projection show? Work with a good plan administrator to model out how much goes into your account versus everyone else's. The type of profit-sharing method matters a lot - you're probably looking for something called "new comparability" profit sharing.
Second, what's the tax impact? Run a projection with your advisor and tax pro. If you're in a higher tax bracket (especially if you're phasing out of the QBI deduction, child tax credit, or other deductions), profit sharing can be powerful. But if you're deferring at 22% or 24%, and you're lowering your QBI deduction in the process, maybe it's not worth it.
Third, do you have the liquidity? If you're working on building cash reserves for the practice or household, maybe it makes more sense to hold off and revisit this later in 2026.
When it works, profit sharing is magic. And if you're a larger, established practice with strong cash flow and want to defer $100K+, cash balance plans might be worth exploring too.
4. Cost Segregation Studies (For Real Estate Investors)
This one's for you if you own rental properties - residential, commercial, short-term rentals, or even the building your practice operates out of.
A cost segregation study is an engineering analysis that breaks down your property into components with shorter depreciation schedules. The goal is to accelerate depreciation into the current tax year.
And here's the kicker: properties purchased and placed in service after January 19, 2025, are now eligible for 100% bonus depreciation again.
That can create a massive tax deduction.
But it doesn't always make sense.
When might it make sense?
- You're in a reasonably high tax bracket
- You plan to hold the property long-term (because when you sell, you'll deal with depreciation recapture)
- You have a plan for those tax savings - ideally reinvesting them immediately to take advantage of the time value of money
- The property treatment works for you tax-wise (e.g., short-term rental rules, real estate professional status, or grouping your practice real estate with your practice income)
When might it not make sense?
- You're going to sell soon
- The losses would be passive and get "stuck" with no way to use them
- You're just going to spend the tax savings instead of reinvesting them
Cost segregation studies can be a powerful tool, but you need to work closely with your tax pro to understand the limitations and long-term implications.
Your Next Steps
These four levers are still available - but the clock is ticking on some of them.
Talk to your financial advisor, your tax professional, and (if relevant) your 401(k) plan administrator. Look at projections. See what makes sense for your specific situation.
Everyone's tax and financial picture is different. The goal here isn't to push you toward any particular strategy - it's to help you see what's still possible and make informed decisions with your team of advisors.
And if you're thinking, "I really need to get more proactive about this stuff instead of scrambling at tax time," we should talk. That's exactly what we help optometrists do all year long.
Reach out here if you'd like to schedule a short intro call, and let's plan for proactively for 2026.
Have a great weekend!
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