As tax season nears its final stretch, there’s still time for you to make strategic financial moves that could lower your tax bill and set you up for success. Whether you’re a W-2 associate or a 1099 relief vet, here are three critical last-minute tax moves for veterinarians to keep in mind before filing.

1. Max Out Tax-Advantaged Accounts Before the Deadline

One of the easiest ways to reduce your taxable income is by contributing to tax-advantaged accounts. The good news? You can still make contributions for the prior tax year up until April 15th (or the tax deadline for the year).

Traditional or Roth IRA Contributions – You can contribute up to $7,000 ($8,000 if you’re 50 or older) for the previous tax year. However, income limits apply. 

• Roth IRA – Contributions phase out if your Modified Adjusted Gross Income (MAGI) is between $146,000 and $161,000 (single) or $230,000 and $240,000 (married filing jointly) for 2024.
• Traditional IRA –  If you or your spouse are covered by a workplace retirement plan, the deduction phases out for MAGI between $77,000 and $87,000 (single) or $123,000 and $143,000 (married filing jointly).
• Married Filing Separately (MFS) – If you are married but file separately and lived with your spouse at any time during the year, the deduction for a traditional IRA phases out at $10,000 MAGI and is eliminated entirely above that. If you did not live with your spouse at any point, you can use the single filer phase-out ranges.
• Roth IRA and MFS –  If you file MFS and lived with your spouse, the Roth IRA contribution phases out completely at $10,000 MAGI. If you did not live with your spouse at any point during the year, the single filer Roth IRA limits apply.

Health Savings Account (HSA) –  If you’re enrolled in a high-deductible health plan, you can still contribute up to $3,850 (single) or $7,750 (family) for 2024.

SEP IRA or Solo 401(k) Contributions – If you’re a relief veterinarian or own your own practice, you may have until your tax filing deadline (including extensions) to contribute significantly to these retirement plans, potentially reducing taxable income by thousands.

2. Consider Filing a Tax Extension for IDR Income Recertification

For veterinarians on an Income-Driven Repayment (IDR) plan, filing a tax extension could be a smart strategy. Your monthly payment under IDR is based on your most recently filed tax return, so delaying your tax filing could help lower your payments if your prior year’s income was lower than your current income.

When should you consider filing an extension?

Use these guidelines to help decide.

• If your income increased significantly in 2024 compared to 2023, and you want to keep your payments lower for another year.
• If you anticipate switching to a different IDR plan, and timing your income certification strategically could benefit you.
• If you’re working toward Public Service Loan Forgiveness (PSLF): PSLF requires 120 qualifying monthly payments, and lower payments mean more of your balance is forgiven tax-free at the end of the program. If your income has increased, filing an extension may allow you to use a lower income from a prior tax return to keep your payments lower for another year, maximizing the amount forgiven.

3. Plan for Estimated Taxes & Avoid Underpayment Penalties

If you’re a 1099 relief vet or practice owner, you likely need to make estimated tax payments throughout the year to avoid a surprise tax bill and penalties.

Did you underpay in 2024? If you owed taxes last year, you might need to adjust your quarterly estimated tax payments for 2025 to avoid an underpayment penalty.

Safe Harbor Rule: To avoid penalties, you must pay at least 90% of your current year’s tax liability or 100% of last year’s tax liability (110% if your AGI is over $150K).

Set aside a percentage of income – A good rule of thumb is to save 25-30% of your income for taxes, depending on your deductions and state tax obligations.

Final Thoughts

The tax deadline is approaching fast, but there’s still time to make smart financial moves. Whether it’s maximizing your tax-advantaged savings, strategically timing your IDR income recertification, or planning ahead for estimated taxes, these last-minute tax moves can put you in a stronger financial position for the year ahead.

If you have questions about your specific tax situation, consult with a financial planner or tax professional to ensure you’re making the right moves. Need help? Let’s chat.