Maximize Savings: Your Tax Strategy Playbook

With the April 15 tax filing deadline approaching, now is an ideal time to review your financial picture and identify opportunities to improve your tax efficiency. Proactive planning can help reduce your tax liability, preserve more of your hard-earned income, and position you more strategically for the year ahead. Whether you’re an individual investor or a business owner, thoughtful tax planning can have a meaningful impact on your overall financial strategy.

Below are some tax reduction strategies to consider. As always, consult with your CPA, Oppenheimer Financial Professional, or tax advisor to determine how these strategies may apply to your specific circumstances.

Harvest Tax Losses:

Tax-loss harvesting involves selling investments that have declined in value to offset realized capital gains, thus reducing your tax liability on gains. When capital losses are greater than capital gains you may be able to deduct up to $3,000 from your taxable income ($1,500 if married and filing separately). Losses that exceed $3,000 can be carried forward and used in future years.

Maximize Retirement Contributions:

One of the most effective ways to reduce taxable income is to maximize contributions to your retirement accounts. For individuals, contributing to a 401(k), 403(b) or an Individual Retirement Account (IRA)* can lower your taxable income. For businesses, offering retirement plans like SEP IRAs or 401(k)s not only helps employees save for retirement but may also allow the business to deduct contributions up to a certain amount. 

*IRA Contribution Eligibility is Subject to Modified Adjusted Gross Income (MAGI) limitations

Charitable Giving:

Donating to charitable organizations not only supports a good cause but may also offer tax benefits. If you are age 70½ or older, you may make Qualified Charitable Distributions (QCDs) directly from your IRA to eligible charities. For the 2025 tax year, the QCD limit is $108,000 per person. (This amount is indexed annually and may increase to $111,000 in 2026.) QCDs can satisfy Required Minimum Distributions (RMDs), if applicable, and are excluded from taxable income, which may help lower your adjusted gross income.

If you are itemizing your deductions, charitable contributions are subject to a 0.5% of adjusted gross income (AGI) floor beginning in 2026. This means that only the portion of your total contributions exceeding 0.5% of your AGI is deductible. Note that the new 0.5% AGI floor and the 35% deduction cap take effect for the 2026 tax year (returns filed in 2027).

For example, if your AGI is $200,000, the first $1,000 of contributions would not be deductible. Cash donations to qualified charities are generally deductible up to 60% of AGI, while donations of appreciated assets (such as long‑held stocks) can be deducted at fair market value and are limited to 30% of AGI. Donating appreciated assets directly to a charity also allows you to avoid capital gains taxes on the appreciation. Even if you do not itemize, you may still claim a universal charitable deduction: up to $1,000 for single filers or $2,000 for joint filers for cash contributions to qualified charities.

Tax Efficiency of Your Asset Allocation:

Consider the tax-efficiency of the investments in your portfolio. Certain options such as government bonds or municipal bonds may provide certain tax benefits. Others, such as mutual funds, tend to distribute capital gains to the investor (i.e. you) whether you’ve sold the fund or not. The type of account you hold these securities in matters also. A tax-deferred (IRA) or tax-free (Roth IRA) account may be better suited for investments that carry potential tax burdens while after-tax accounts may be better suited for investments that are more tax efficient.

Review and Adjust Withholding:

You should review your tax withholding throughout the year to ensure you are not overpaying or underpaying taxes. Adjustments may be necessary due to changes in income, deductions, or tax laws. Accurate withholding can help avoid penalties and maximize cash flow.

Take Advantage of Tax Credits:

Tax credits can directly reduce the amount of taxes owed. You can explore available tax credits, such as the Child Tax Credit ($2,000 for the 2025 tax year and is scheduled to increase to $2,200 for the 2026 tax year per qualifying child through the One Big Beautiful Bill, with a maximum refundable portion of $1,700), or Earned Income Tax Credit (EITC) to lower overall tax liability.

Estate and Gift Planning:

Estate and gift planning can be essential for wealth preservation and minimizing estate taxes. Consider strategies such as gifting assets to family members now or to heirs, establishing trusts, or leveraging the lifetime gift tax exemption to pass on assets tax-efficiently. The IRS allows for anyone to gift up to $19,000 per person for the 2025 and 2026 tax years ($38,000 for married couples using gift splitting).

Capitalize on Small Business Tax Deductions:

Consult with Tax Professionals:

Finally, it's important for you to consult with tax professionals, such as certified public accountants or tax advisors, to ensure you are making informed decisions that align with your unique financial situations. Tax laws are complex and are continually evolving, making professional guidance invaluable.

There’s still time to implement these powerful tax-saving strategies and improve your financial outlook before the April 15 deadline. Taking proactive steps now can lead to significant savings. To ensure you’re making the most of these opportunities, working with a trusted tax and financial professional is essential. Start planning today to secure a more financially optimized tomorrow.

Oppenheimer Financial Professionals are here to help. Find one near you today.