The clock is ticking, and December 31, 2025, is closer than you think. Whether you’re thinking about marriage, divorce, paying your children, or gifting to loved ones, your year-end decisions could have a big impact on your taxes.

Here are five key strategies to consider before the year ends.

1. Put Your Children on Your Payroll

If you have a child under 18 and run your business as a Schedule C sole proprietorship or a spousal partnership, consider employing your child.

Benefits:

• Neither you nor your child pays payroll taxes on the child’s income
  
• With a traditional IRA, the child can avoid federal income taxes on up to $22,750 of earned income
  

If your business is a corporation, you can still hire your child. Payroll taxes apply, but it may still be worth it for retirement savings, teaching work habits, and shifting income to a lower tax bracket.

2. Time Your Divorce Carefully

The IRS considers you married for the entire year if you’re married on December 31. Timing a divorce or separation can have significant tax consequences.

Important note on alimony:

• Divorces finalized after December 31, 2018: Alimony payments are not deductible for the payor, and the recipient does not include them in income
  
• Older agreements follow the old rules: deductible for payor, taxable for recipient 

Planning the timing of a divorce or separation can affect your overall tax situation, so it’s worth consulting a tax professional before year-end.

3. Stay Single to Maximize Mortgage Deductions

Two single people may deduct more mortgage interest than a married couple.

• Homes purchased on or before December 15, 2017: Each person can deduct interest on up to $1 million, so a combined deduction of $2 million is possible
  
• Homes purchased after December 15, 2017: Combined limit is $1.5 million
  

If you’re planning to marry, you may want to consider how this affects your mortgage interest deduction.

4. Get Married on or Before December 31

Being married on December 31 means you’re considered married for the entire 2025 tax year.

• This can create tax savings, especially if filing jointly works in your favor
  
• Run the numbers first: compare married vs. single tax outcomes before rushing to the courthouse
  

Marriage timing can be a strategic year-end move if you want to maximize deductions and credits.

5. Take Advantage of the 0 Percent Capital Gains Tax Bracket

Do you gift money or assets to family or friends? Consider using the 0 percent capital gains tax bracket to reduce taxes.

• Single: taxable income under $48,350
  
• Married: taxable income under $96,700
  

Example:

• Gift Aunt Millie stock worth $20,000, originally purchased for $2,000
  
• She sells it and pays zero capital gains tax
  
• If you sold the stock yourself, taxes would be around $4,284
  

Gift-tax note:

• Gifts above the $19,000 exclusion count against your estate tax exemption
  
• Married couples can combine exclusions for a total of $38,000 per recipient
  

This strategy is a smart way to shift wealth, reduce taxes, and support loved ones before year-end.

End-of-year planning isn’t just about writing checks or paying bills, it’s about strategically positioning your family and finances for 2025.

Whether you’re paying children, timing a marriage or divorce, or gifting appreciated assets, a few smart moves before December 31 can make a significant difference in your taxes.

Basc Expertise can help you navigate these choices and make sure you maximize your deductions, credits, and planning opportunities before the year closes.