In 2025, I received about 1 year's salary, in addition to regular salary as part of my severance package after losing my job. What are ways to save on taxes this year?

[Bsch4477 · Accepted solution]

If eligible and applicable tax savings can be accomplished by contributing to a retirement plan, an HSA and harvesting capital losses. If you itemize try bunching deductible items such as charitable contributions and property tax into this year. 

[Daniel233]

A large severance can push you into a higher tax bracket, but you can reduce the impact. Contribute the maximum to tax-advantaged accounts like a 401(k), IRA, or HSA. If eligible, make catch-up contributions. You might also defer income (if possible) or prepay deductible expenses. Check if severance qualifies for income averaging or lump-sum distribution rules in your country. Consulting a tax advisor is worth it — timing and contribution limits matter a lot.

[Mike9241]

before contributing to tax deductible plans or paying tax deductible expenses, consider how long until you find employment. you don't want to be in a position where you don't have the money to pay your necessary expenses.