5 key deductions and credits for 2025 tax returns

2025 is over. Are there still tax deductions or credits that your clients may be eligible to take on their 2025 tax return?

The short answer is yes! Even though the calendar year has ended, there are still opportunities for your clients to reduce their 2025 tax liability. Here are some key reminders and strategies to keep in mind.

1. Traditional IRA contributions

One that comes to mind applies to traditional IRAs. Those contributions may be tax deductible; contributions made on or prior to April 15, 2026 can be applied to 2025.

For 2025, the individual contribution limits are:

• $7,000 if under age 50
• $8,000 if age 50 or older

Clients should contact their financial advisor or IRA custodian to make their 2026 traditional IRA monetary contributions apply to 2025. Also check irs.gov for more information on IRA contribution limits.

2. The Saver’s Credit

Another possibility is the Savers Credit. While Roth IRA contributions are not tax deductible because they are made with after-tax dollars and the withdrawals or distributions are made tax free, Roth contributions may qualify for the Saver’s Credit. This credit is designed to encourage retirement savings and can be worth 50%, 20%, or 10% of contributions to eligible accounts, including:

• Traditional IRAs
• Roth IRAs
• 401(k) and similar plans

The maximum credit is $2,000 for individuals and $4,000 for married couples filing jointly. Income limits apply, so check eligibility on irs.gov.

Even though Roth IRA contributions are not tax deductible, your clients can still apply their 2026 Roth monetary contributions to 2025, if made on or before April 15, 2026.  Clients should contact their financial advisor or IRA custodian to make their 2026 monetary Roth contributions apply to 2025. Also check irs.gov for more information on IRA contribution limits.

3. Estimated tax payments

Clients who make quarterly estimated tax payments or should be making them still have time to apply a payment toward their 2025 liability. The final estimated payment for 2025 is due January 15, 2026. Making this payment on time can help avoid penalties and interest.

For more information regarding estimated tax payments, please visit irs.gov.

4. Payroll for business owners

If your client pays themselves through a paycheck (paycheck with payroll taxes withheld), encourage them to issue themselves a paycheck throughout the year and at year end rather than taking owner draws or distributions. Why?

• Salary and wages are deductible business expenses, reducing taxable income on the profit and loss statement.
• Owner draws and distributions do not reduce business income and are recorded on the balance sheet instead.

This simple adjustment can make a significant difference in lowering taxable income for the business.

5. Recordkeeping and accounting best practices

Accurate recordkeeping is essential for maximizing deductions and credits. Encourage clients to:

• Keep all tax documents organized.
• Track business income and expenses consistently.

While spreadsheets can work for very small businesses, double-entry accounting software such as QuickBooks Online offers better accuracy and efficiency. If you provide accounting services, consider setting clients up in QuickBooks Online and explore Intuit’s ProAdvisor Revenue Share Program for additional benefits.

Get more information on Intuit’s revenue share program.

Additional tips for tax planning

• Health Savings Accounts (HSAs): Contributions made by April 15, 2026 can also count toward 2025, offering tax deductions and long-term savings benefits.
• Charitable Contributions: Ensure all charitable donations made by December 31, 2025 are documented.
• Education Credits: Review eligibility for the American Opportunity Credit or Lifetime Learning Credit if clients paid tuition in 2025.

Final thoughts

Even though 2025 has ended, proactive planning can still help clients reduce their tax liability. These steps can make a big difference when filing their 2025 return. This article does not contain a complete list of potential tax credits or deductions, but it does include a few things to keep in mind for the 2025 tax filing season. Encourage clients to consult with you or another accounting or tax professional to verify eligibility of tax deductions and credits. Also, encourage them to do things like verify contribution designations, and maintain accurate records.