Tax season may seem far off, but summer is the perfect time to take strategic steps to reduce your 2025 tax liability. With a few smart financial decisions, you can save significantly come April, avoiding the last-minute scramble to find deductions and credits. Here are some mid-year moves to consider that can lead to big savings later.

Check Your Tax Withholding

If you've experienced life changes or income shifts, now is the time to adjust your tax withholding. Increasing withholding might help you avoid a surprise bill, and decreasing it could free up income if you're overpaying. Use the IRS Withholding Calculator to get an estimate and make necessary adjustments on your W-4 form.

Contribute to Retirement Accounts

Boosting your 401(k) or IRA contributions is a powerful way to reduce taxable income while enhancing your future savings. The contributions are deducted from your income before taxes, which means more money saved both now and for retirement.

Take Advantage of Tax-Advantaged Accounts

Consider contributing to Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) to lower your taxable income. HSAs offer a triple tax benefit—contributions are pre-tax, earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free. Be wary of the “use-it-or-lose-it” rule with FSAs and check your plan for any grace period or rollover provisions.

Consider Charitable Contributions

Donating to qualified charities can provide a deduction if you choose to itemize. Remember to document all contributions, whether cash or goods, to ensure you can claim them. Charitable giving can be a meaningful way to help others while reducing your tax bill.

Leverage Tax Credits

Explore the various tax credits such as the Child Tax Credit and education credits that can provide significant savings. These credits are often subject to income thresholds, so checking eligibility mid-year allows for better planning and possibly taking advantage before it's too late.

Mid-year tax planning doesn't have to be overwhelming—it's an empowering step towards greater financial control and confidence. Acting now means you won’t miss out on potential tax savings. Take the time to review your current financial situation and consult a tax professional to ensure you are maximizing your opportunities for deductions and credits.