7 tax strategies that can save you up to $50K before the year ends

When I first moved to the US, I had no idea how many tax savings and incentives were available here. Looking back, I wish someone had handed me a simple guide - especially explaining the difference between what you can do as a 9–5 employee versus what becomes possible the moment you earn any side-hustle or business income. So here are the year-end strategies that can help you save anywhere from $5k-$50k before end of the year ⬇️

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1️⃣ Max your work 401(k)

<div class="frich-tip">Tax savings: $5,000–$8,200.</div>

This is the easiest year-end move to lower your taxable income. Here's how to do it:

• Log into your employer benefits portal
• Find “Change Contribution”
• Increase your % for your final paychecks

Note that the 2025 contribution limit is $23,500.

Frich team hacks:

• If your final paycheck is dated January 1 but is for December work, you can still increase your 401(k) contribution for that paycheck & it counts for this tax year
• You can temporarily raise your contribution to 50–75% of your paycheck for the last cycle or two. You can drop it back down in January

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2️⃣ Max your HSA

<div class="frich-tip">Tax savings: $1,300–$3,000</div>

An HSA is one of the most powerful tax tools in the U.S. It’s the only account where your money is:

• Put in tax-free
• Grows tax-free
• Spent tax-free on healthcare

2025 limits:

• Single: $4,300
• Family: $8,550

However there's one caveat - you can only use an HSA if you're on a High Deductible Health Plan (HDHP). Check your plan by:

• Looking at your insurance name: it will say “HSA,” “HSA-compatible,” or “HDHP.”
• Or opening your benefits summary → look for “HSA-eligible: Yes.”

If it says yes, you can open or contribute to an HSA right now. You’re going to spend money on healthcare no matter what -doctor visits, therapy, dermatology, dental, prescriptions. With an HSA, you pay for all of that with tax-free money instead of taxed money. And if you invest your HSA, it becomes a second retirement account that grows tax-free for life. Here's how:

• Increase contributions in your employer benefits portal, or
• Open one at Fidelity / Lively / HealthEquity if you have an HDHP
• You can contribute for the year until April 15, but doing it before December reduces this year’s taxes

Frich team hacks:

• Once your HSA hits the minimum (usually $1–$2K), turn on investing
• Most people leave their HSA in cash but investing it is where the real wealth benefit happens

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3️⃣ Use pre-tax commuter benefits

<div class="frich-tip">Tax savings: $800–$1,500</div>

If you live in a city and take the subway, bus, train, ferry, or pay for parking, this benefit is one of the easiest ways to save money without doing anything extra. Here's how it works:

• Your employer lets you pay for commuting costs using pre-tax dollars
• Instead of paying for your subway pass or train ticket with post-tax income, the money comes out of your paycheck before taxes which instantly lowers your taxable income

2025 limit: ~$300/month pre-tax

Check if you have it by going to your employer's payroll or benefits portal and look for:

• Commuter benefits
• Transit benefits
• Qualified transportation
• Pre-tax transit
• Transit FSA

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4️⃣ Solo 401(k): the “Hidden $46,500 Bucket”

<div class="frich-tip">Tax savings: $10,000–$20,000+</div>

This is the single biggest tax advantage you unlock the moment you earn any income outside your 9–5. Yes, even a small LLC, UGC deal, freelance client, or consulting project qualifies.

A Solo 401(k) lets you put some of your side-hustle profit into a retirement account before taxes. That means you pay taxes on a smaller number & keep more of your money. Why it’s so powerful:

• Your job 401(k) only covers the employee part.
• But with a Solo 401(k), your LLC gets access to the employer part too.

If your side business made a profit this year, your LLC can put 20–25% of that profit into a Solo 401(k) before taxes. That contribution becomes a business deduction, which lowers how much tax you owe. Here's an example:

This is how founders and creators legally keep more of their income.

Frich team hack:

• You must open the Solo 401(k) by December 31,but you can fund it later (when you file taxes). This is the easiest way to set one up.

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5️⃣ If you earn any side-hustle income and regularly work from home, you can deduct a portion of your rent and utilities

<div class="frich-tip">Up to $5k/annual tax savings.</div>

If one area of your home is used regularly and exclusively for work, you can deduct the same percentage of:

• Rent
• Internet
• Electricity
• Heating/cooling
• Cleaning
• Repairs (pro-rated)

Here's an example:

Here's how to file your home office deduction:

• If you file taxes yourself (TurboTax, etc.):
  
  • Go to Business Expenses → Home Office
  • Enter the size of your workspace and the size of your home
  • Upload rent + utility totals
  • The software automatically calculates the deduction

• If you have an LLC SML (Single-Member LLC):
  
  • This goes on Schedule C under “Business Use of Home”
  • Your CPA will ask for your workspace % and rent amounts

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6️⃣ Accountable plan reimbursements: business use of your personal expenses

<div class="frich-tip">Tax savings: $800–$3,000.</div>

If you have an LLC your business can reimburse you for the business portion of certain personal expenses tax-free such as:

• Phone
• Internet
• Utilities
• Small office supplies
• Workspace setup for your business

Here's an example:

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7️⃣ Business expenses (equipment, software, travel, education)

<div class="frich-tip">Tax savings: $1,000–$10,000+</div>

Once you earn side-hustle or LLC income, the IRS lets you deduct the cost of almost everything you use to run or grow your business. This means you get a built-in discount (usually 25–40%) on tools you were going to buy anyway. If it’s ordinary and necessary for your work, you can usually deduct it:

• Laptop + monitor
• Desk setup / lighting / filming equipment
• Software (Notion, Adobe, Canva, accounting tools, AI tools)
• Subscriptions used for business
• Business travel + lodging
• Educational courses + conferences
• Contractors (editors, designers, VAs)
• Marketing & advertising

Here's an example:

How to claim these deductions in the simplest way:

• Use one dedicated business card (even a debit card)
• Keep all business purchases on that card
• Download monthly statements + upload receipts to Google Drive
• At tax time, your CPA or TurboTax will categorize everything for you