As the year draws to a close, lawyers have a prime opportunity to adjust their tax strategies to safeguard more of their hard-earned money for retirement. Effective tax planning integrates not just investment choices but also tax optimization, estate planning, and risk management into a comprehensive financial strategy. Here are five key tax moves to consider before the year ends:

1. Tax-Loss Harvesting: This strategy involves selling off investments that have incurred losses to offset gains in other areas of your portfolio, thereby reducing your overall capital gains tax liability. It's a practical approach to minimize taxes in a fluctuating market, where historical trends show significant intra-year drops. Remember, the wash sale rule can affect the deductibility of losses, so it’s crucial to navigate this carefully.

2. Tax-Gain Harvesting: Unlike tax-loss harvesting, this strategy involves intentionally realizing gains to benefit from lower tax rates on long-term capital gains. For instance, in 2025, a couple both aged 65 with certain deductions can earn up to $143,400 and still qualify for the 0% capital gains tax bracket. Strategic realization of gains can significantly enhance tax efficiency, especially in early retirement years.

3. Income and Expense Timing: With recent changes increasing the state and local tax (SALT) deduction limit significantly, timing when to pay these taxes can be beneficial. For example, prepaying next year’s taxes could reduce your taxable income now. Similarly, adjusting the timing of income can leverage deductions effectively, such as conducting a Roth conversion during a year with lower income.

4. Charitable Giving Strategies: For those inclined to support charitable causes, making donations from your IRA or donating appreciated securities can offer tax benefits. These moves not only help the charities but also reduce your taxable income or avoid capital gains tax. Furthermore, with upcoming changes in tax laws regarding charitable deductions, accelerating donations might be a wise decision.

5. Retirement Plan Contributions: Don’t overlook the basics. Maximizing contributions to 401(k)s and other retirement plans like HSAs and 529 education savings plans can offer immediate tax deductions or future tax benefits. Notably, contributions to certain plans like an Individual 401(k) can be made until the tax filing deadline if the plan was set up in its first year.

As we near the end of 2025, these strategies can provide substantial financial benefits and reduce tax burdens. Each lawyer’s situation will differ, so it’s advisable to consult with a tax professional to tailor these strategies to your specific circumstances. Implementing even a few of these tactics can lead to significant savings that bolster your financial security in retirement.