5 Tax Moves to Make Before December 31st

Tick, tock. With the calendar ready to flip like a pancake at a diner, we're serving up five strategic tax moves that could save you serious cash. Think of this as your financial meal prep for 2025 – except instead of chicken and rice, you're portioning out tax savings. So grab your calculator, your favorite snack, and read on.

The Kitchen Timer Is Running ⏰ 

Americans are expected to collectively owe approximately $4.1 trillion in federal taxes this year. As a 1099 physician in the 35-37% tax bracket, nearly four out of every ten dollars you earn goes straight to Uncle Sam. But strategic moves made right now could significantly reduce what you owe. Consider this your recipe for tax savings.

1. The Main Course: Maxing Out Your Retirement Contributions

As a 1099 physician, retirement contributions aren't just side dishes; they're the entrée that keeps you fed for years to come. 2025 Limits:

• Solo 401(k): Up to $70,000 total ($77,500 if 50+)

• SEP IRA: Up to 25% of net income, max $70,000

  
  

You can contribute as both employee AND employer—talk about a two-for-one special. On $250,000 of net income, contribute $70000 to a solo 401(k) and save roughly $25,900 in federal taxes.

Do This: Set up a solo 401(k) or SEP IRA before December 31st. Most can be established online in under an hour.

2. Drinks Edition: Squeezing Out Savings

When life gives you lemons—or in this case, losing investments—make lemonade. Your portfolio might have some sour spots, but we're about to turn that bitterness into something refreshingly profitable.

Real Dollar Impact: Made $50,000 in gains this year from that tech stock you bought during residency? Have some underperforming investments down $20,000? Sell the losers and save $4,760 in capital gains tax. Use $3,000 in excess losses against ordinary income for another $1,110. Total: nearly $6,000 saved.

Watch out for leftovers: The wash-sale rule says if you repurchase the same security within 30 days, the IRS disallows your loss deduction. It's like telling yourself you'll save the leftover pizza for tomorrow, then eating it at midnight. The IRS knows your tricks. However, it’s worth noting that these wash-sale rules do not currently apply to cryptocurrency. This provides a great tax savings opportunity if you have cryptocurrency that has temporarily decreased in value. 

Do This: Review brokerage accounts and sell losing positions before December 31st.

3. The Potluck Strategy: Bunching Your Charitable Contributions

Real Dollar Impact: Normally donate $20,000 annually to your alma mater, local hospital foundation, and other causes? Instead, donate $40,000 in 2025 and take 2026 off. That extra $20,000 in deductions saves $7,400 federal plus your state rate on top. In California? Add another $2,600 for a total of $10,000 saved. Now that's a potluck worth attending.

Bonus move: Donate appreciated stock to avoid capital gains tax AND get the full deduction. With $20,000 in stock bought for $10,000, you save $9,780 total. Win-win, like successfully placing an IV on the first try.

Do This: Use donor-advised funds to frontload contributions in high-income years. Credit card donations count as of charge date, no need to worry about the check getting lost in the mail like that casserole dish you lent out last Thanksgiving.

4. Feast on Business Deductions: The 1099 Advantage

Welcome to the all you can deduct buffet, exclusively for 1099 physicians. Load up your plate—these deductions won't eat themselves, and unlike that buffet in Vegas, this one actually pays you to participate.

Potentially Deductible Expenses for 1099 Physicians:

• Home office: Regular and Exclusive-use space for charting, telemedicine (i.e., primary place of business) 

• Mileage: 70¢ per mile between work sites

• Professional: Malpractice insurance, medical equipment, dues, continuing education

• Technology: Laptop, phone, EMR software used in the business 

• Health insurance premiums: Fully deductible

  
  

Real Dollar Impact: With $25,000 in legitimate expenses ($8K home office, $5K mileage, $4K CME, $3K insurance, $5K tech), you save roughly $13,000 in taxes. That's a hearty serving of savings that'll keep you satisfied all year long.

Do This: Review all business expenses. Make year-end purchases, equipment, software, prepaid insurance, before December 31st.

5. Don't Let the Bill Get Cold ❄️: Making Quarterly Estimated Tax Payments

Have a side hustle? You need quarterly estimated tax payments. Think of it like paying for your meal as you go instead of letting the tab pile up. The fourth quarter payment for 2025is due January 15, 2026, but paying before December 31st can help you avoid underpayment penalties for the full year.

Real Dollar Impact:The IRS underpayment penalty hovers around 8%. On a $50,000 underpayment, you could owe $4,000 in penalties. 

Safe harbor rule: Pay 110% of last year's total tax liability to avoid penalties.

Do This: Had a jump in income? Make an estimated payment through IRS Direct Pay or EFTPS before January 15tht. Your April  self will thank you.

The Check, Please

Doc Wealth specializes in tax strategy for physicians. Every dollar you keep is a dollar that goes toward your goals instead of the IRS. 

Book a call with Doc Wealth before the year-end rush. You didn't spend years in medical training just to hand over 40% of your income without a fight.

Time's ticking. The kitchen timer is beeping. These tax savings won't serve themselves.

Disclaimer: This material is intended for educational and informational purposes only and does not constitute tax, legal, accounting, or financial advice. The content is general in nature and may not apply to your specific circumstances. Tax laws and financial regulations are subject to change and interpretation, and the application of these laws can vary based on individual situations. Before making any decisions, you should consult with a qualified tax advisor, legal counsel, or financial professional.