Introduction
The end of the calendar year is a critical window for tax planning. Decisions you make in the final weeks of December can have a direct impact on how much you owe — or how much you get back — when you file your return in the spring.
At PJS Tax Accounting Service in Wilmington, Ohio, we encourage our clients to think about taxes year-round, not just during filing season. But if you have not started planning yet, December is not too late. Here are five proven strategies that can help individuals and business owners in Clinton County lower their tax bill before the clock runs out.
Strategy 1: Maximize Your Retirement Contributions
Contributing to a tax-advantaged retirement account is one of the most powerful ways to reduce your taxable income. And unlike some strategies, this one benefits you twice — by lowering your current tax bill and building wealth for the future.
For employees:
- 401(k) contributions must be made by December 31 through payroll deductions
- The 2026 contribution limit is $23,500 (plus $7,500 catch-up if you are 50 or older)
- Talk to your employer’s HR department if you want to increase your contribution for the remaining pay periods
For self-employed individuals:
- SEP-IRA contributions can be made until your tax filing deadline (including extensions)
- You can contribute up to 25% of net self-employment income, up to $69,000
- Solo 401(k) employee deferrals must be made by December 31, though employer contributions can wait
If you are a small business owner in Wilmington who has had a profitable year, a SEP-IRA contribution is one of the fastest ways to reduce your tax liability significantly.
Strategy 2: Harvest Investment Losses
If you have investments that have declined in value during the year, selling them before December 31 allows you to use those losses to offset capital gains and up to $3,000 of ordinary income per year. Any excess losses carry forward to future years.
How tax-loss harvesting works:
- Review your investment portfolio for positions that are currently at a loss
- Sell the losing investments before year-end
- Use the losses to offset gains from other investments
- Reinvest in a similar (but not identical) investment after 31 days to avoid the wash-sale rule
This strategy is particularly valuable if you sold a property, business interest, or other asset at a gain earlier in the year. The harvested losses can directly reduce the tax on those gains.
Important note: The wash-sale rule prevents you from claiming a loss if you buy a substantially identical investment within 30 days before or after the sale. We can help you navigate this rule to maximize your benefit.
Strategy 3: Accelerate Deductions and Defer Income
This is a classic year-end strategy, and it works for both individuals and businesses in Clinton County.
Accelerate Deductions
- Prepay deductible expenses: If you itemize, consider prepaying your January mortgage payment, property taxes, or state income tax estimate before December 31
- Stock up on supplies: Business owners can purchase office supplies, equipment, and inventory before year-end to claim the deduction in the current year
- Make charitable donations: Cash, stocks, and goods donated to qualified organizations are deductible if made by December 31
Defer Income
- Delay invoicing: If you are a self-employed individual or business owner, wait to send out invoices until after January 1 so the income falls into the next tax year
- Defer bonuses: Employers can delay paying year-end bonuses until early January, pushing the taxable income to the following year
- Time asset sales: If you are planning to sell a business asset at a gain, waiting until January may lower your current-year tax bill
A word of caution: This strategy works best when you expect to be in the same or lower tax bracket next year. If your income is likely to increase significantly, you may actually benefit from accelerating income into the current year instead. This is where personalized advice from a professional makes a real difference.
Strategy 4: Take Advantage of Section 179 and Bonus Depreciation
If your business needs equipment, vehicles, technology, or other capital assets, purchasing them before December 31 allows you to deduct the full cost in the current year under Section 179 or bonus depreciation rules.
Section 179 highlights:
- Deduction limit of over $1 million for 2026
- Applies to new and used equipment, vehicles, software, and certain improvements to commercial property
- The asset must be placed in service (not just purchased) before year-end
Common qualifying purchases for Clinton County businesses:
- Computers, printers, and office technology
- Vehicles used for business (SUVs over 6,000 GVWR have enhanced deduction limits)
- Farm equipment for agricultural businesses in the Wilmington area
- Specialized tools and machinery
If you have been considering a major equipment purchase, doing it before December 31 rather than waiting until January can provide an immediate tax benefit.
Strategy 5: Review and Optimize Your Withholding
If you are employed, take a few minutes to review your current tax withholding. If you typically owe a large amount or receive a very large refund, your withholding may not be calibrated correctly.
If you usually owe at filing:
- Increase your withholding for the remaining pay periods of the year
- Make an estimated tax payment by January 15 to cover the shortfall
- Adjust your W-4 for the new year to prevent the same issue
If you usually receive a large refund:
- A large refund means you are essentially giving the government an interest-free loan
- Consider reducing your withholding so you take home more money each paycheck
- Redirect the extra cash into savings, retirement contributions, or debt repayment
Getting your withholding right is a simple change that can improve your cash flow throughout the year.
Bonus: Ohio-Specific Year-End Considerations
Ohio residents have a few additional items to review before December 31:
- Ohio 529 contributions: Contributions to an Ohio 529 plan are deductible on your Ohio state return (up to $4,000 per beneficiary). If you have children or grandchildren, this is a great last-minute deduction.
- School district income tax: If you live in a school district that levies an income tax, make sure your estimated payments are current to avoid penalties.
- Municipal tax credits: If you work in one Ohio municipality but live in another, verify that you are receiving the proper tax credit on your local return. Many Wilmington residents who work in other cities miss this credit.
Don’t Wait Until April
The most effective tax planning happens before the year ends — not when you sit down to prepare your return in the spring. By taking action in November and December, you have far more control over your tax outcome.
At PJS Tax Accounting Service, we offer year-round financial consulting to help you make proactive decisions about your taxes. Whether you need help with retirement planning, business deductions, or year-end strategy, our team in Wilmington is ready to help.
Ready to plan your year-end tax strategy? Contact PJS Tax Accounting Service at (513) 706-0852 or schedule a consultation. We serve individuals and businesses throughout Wilmington, Clinton County, and the surrounding Ohio communities.