The ‘don’t blame me’ blurb: I am not a financial advisor, portfolio manager, or accountant. This is not tax or investment advice; it’s information to get you going. Please consult your trusty professional and do your due diligence. Carry-on!

TL;DR

Adding funds to your tax-deductible retirement accounts can save thousands in taxes.
Get your QuickBooks in order and chat with your accountant before the end of the year.
Your i401(k) aka the Solo 401(k), has both employee and employer contributions. Can you add more for the deduction?
The HSA - Your Health Savings Account — use it for health expenses or as a retirement account like an IRA (401 (k), the contributions are an instant tax deduction.
The Backdoor Roth IRA (not a tax deduction, but a tax-free investment powerhouse.)

2025 is almost over. If you’re like me, you’re thinking, “How did we get here so fast?” It’s time to look at your finances and see if you have any spare cash to add to your retirement accounts and get the tax deduction. It could save you thousands in taxes. Plus, investing for the future can make you literally millions.

Example: If your top tax rate (called the marginal tax rate) is 32% and you put an extra $10k into an i401(k), you’ve just saved $3,200 in taxes. Read about how your income tax rates work here.

Now is the time to get your QuickBooks in order and talk to your accountant. Don’t wait until after the year ends!

The i401(k)

If you haven’t opened an i401(k), there is still time. Read the guide here, get it open before year-end, and stash some cash in it for the deduction. It will make you rich.

As you know, you are both the employee and the employer for the i401(k).
Employee contributions must be made by the end of the year.
Your company contribution (Sole Traders — 20% of your business profit, S-Corps — 25% of the W-2 wage you paid yourself) can be made in 2026 up to your filing or extension date if you’re a Sole Trader or S-Corp. Check with your accountant.

Employee (you) contribution limit per year:

$23,500 in 2025 up to age 49
$31,000 in 2025 if you’re 50 and over
$34,750 if you’re 60-63. (This is a new catch-up category for 2025.)

Total contribution limit of the i401(k) in 2025:

$70,000 up to age 49
$77,500 for age 50+
$81,250 age 60-63

The HSA — Health Savings Account

The HSA is a fantastic account that is not talked about enough. Contributions are tax-deductible, account growth and gains are tax-free, and spending the funds can be tax-free or taxable, depending on when and how you use them. Read about the HSA here.

Contributions can be made for the year up to April 15 of the next year. Example: For the 2025 year, you can contribute by April 15, 2026.

Contribution limits:

$4,300 for singles.
$8,550 for families.
People over age 55 get an additional $1,000.

The Backdoor Roth IRA

The Roth IRA isn’t a tax deduction, but it has the advantage of growing tax-free, and at 59 1/2, you can begin to withdraw funds tax-free. With a traditional 401(k) or i401(k), when you start withdrawing money, it is taxed as income. This is not always a bad thing, as you will be paying yourself much less in retirement vs when you were earning, so the tax rates you pay will be much lower.

There is an income limit that may exclude you from contributing to a Roth IRA, but there is a legal workaround known as the Backdoor Roth IRA. But, watch out for the IRS's pro-rata rule for Backdoor Roth Conversions. Read about it here.

You can also withdraw your original contributions at any time without penalty, unlike with the other accounts.

Contribution limits:

$7,000 up to age 49.
$8,000 age 50 and over.

If you own a SEP-IRA

If you own a SEP-IRA, your contribution cutoff for 2025 money is April 15, 2026. With an extension, it’s October 15, 2026. In 2026, consider switching to an i401(k), unless you have employees other than your spouse. An i401(k) is easier to contribute to because of the automatic employee $23,500/$31,000 limit, plus the overall contribution limits are higher.

Buying more stuff for your business to save on taxes

I commonly hear this from freelance and self-employed friends and colleagues: “I need to buy something to save on taxes.” It’s the business equivalent of the girl-math meme.

As a business, you want to maximize income and minimize expenses. Using profits to buy more stuff that you may not need hurts you. Yes, you have created a tax deduction, but you have sacrificed profits that would have been money in your pocket.

Only buy business items you really need. If you’ve made an unusual amount of income and you bring a planned capital purchase forward, sure. Otherwise, consider taking extra cash and:

Putting it into your retirement accounts, then you get the deduction, AND it will build wealth in the background.
Invest it in a taxable brokerage account and buy our favourite ETFs
Open a Fundrise account and invest in property. (We both get $50 if you open an account here!)
Go on a trip and enjoy life!

Spread the word

Send this article to your people. We all get wrapped up in the now and forget that what we do today can make millions for Future You. Maybe your freelance, self-employed, or solopreneur business will make you rich, but if it doesn’t, simple, long-term investing will.

A $23,500 contribution growing at 7% for 25 years = $1.5 million.

To see how your contributions can grow, have a play with the compound interest calculator below. Use 7% as the interest rate to see how your investments will grow over time. Compound interest is magic!