As 2025 draws to a close, there are probably a thousand things on your mind: your holiday meal, budgeting for gifts, and how to ring in the new year.
But retired Navy officer Paul Allen would like to add another item to that end-of-year list: your family’s tax situation.
“Most people are not thinking about taxes in fall or winter, only when it’s time to prepare in the spring,” said Allen, the founder of PIM Tax Services in Virginia Beach, Virginia, and a member of the Military Tax Experts Alliance. “But there are steps they could be taking before the end of the year that could reduce their taxes — so if they spend some time on it, they might be able to keep more of their own money.”
One of the top ways to reduce your taxes? Donating to your favorite nonprofits. Besides flowing with the generosity of the holidays, giving to charities before Jan. 1 offers the financial bonus of qualifying for tax deductions for the current year.
“You get to support a cause you care about, plus there are tax benefits,” said Allen. “If you itemize your deductions, you can deduct whatever is contributed from your income and pay less tax at the end of the year.”
Allen, whose clientele is about 85% military families, pointed out that there will be some changes to that rule when filing in 2027: filers who make charitable contributions will get some tax benefits, even without itemizing. But for the upcoming tax season, itemizing is still the way to go.
Some other end-of-the-year tax activities that Allen recommends include contributing to a deductible IRA as it lowers your taxable income, and estimating your upcoming tax burden from your LES (and, if applicable, your spouse’s equivalent job document).
“For sanity’s sake, most people can look at their prior year’s return, and if their financial situation is similar, they can project from there,” Allen said. “But I will often see families have a big out-of-pocket expense because they didn’t check their withholding to see if it would actually cover the tax that was going to be due.”
If it all sounds too confusing, there’s no shame in asking for help, especially from a military-connected tax professional. Service members often have military-specific legal provisions that can complicate returns and even cost extra money — but a tax pro can prevent that expense.
“I get a lot of enjoyment when we find a military family that has either overpaid their taxes or thinks they’re going to have to pay a lot of taxes and we can find a way out for them,” Allen said. “I like fixing those and getting military families’ money back they didn’t realize they were owed.”
For further military-specific tax information, see irs.gov/individuals/military.
