Use this 2025 tax-saving strategy before the end of the year

• Tax-loss harvesting lets investors offset gains or income by selling down assets in 2025.
• The deadline to claim capital losses for next year's taxes is December 31.
• Crypto, Coreweave, and Oracle shares are examples of assets suffering recent losses.

You don't normally associate the time of Christmas cookies and New Year's bubbly with tax season. But even though April is a long way off, it's a good idea to start planning now on how to reduce your tax bill.

If you own stocks or other assets, one simple way to cut down your taxable income is a strategy known as tax-loss harvesting. Essentially, you sell any assets that have lost value since you bought them, locking in the capital loss. The deadline to be able to claim these losses for next year's taxes is December 31, giving you today, tomorrow, and Wednesday to sell.

There are two main ways you can use the strategy to reduce your taxes. One, you can use the losses to offset any capital gains you locked in this year. And two, you can use capital losses to offset regular W-2 income by up to $3,000.

If you use the strategy, keep in mind the wash-sale rule. This stipulates that you can't buy the same asset, or something "substantially identical," in the 30-day period before and after selling for a loss. But in that window, you're allowed to move your money into an asset that is different enough from the asset you're selling.

What constitutes an asset that is different enough is up to the interpretation of the IRS, but an obvious example that probably wouldn't fly is starting a position in the Vanguard S&P 500 ETF (VOO) right before or after selling shares of the SPDR S&P 500 ETF Trust (SPY) at a loss.

One candidate for tax-loss harvesting this year is crypto. The digital assets suffered big losses in 2025. While bitcoin and ethereum are down 6% and 12% year-to-date, respectively, if you bought at their October 7 highs, you'd be down 29% and 37%.

Other assets that have had a rough go of it recently include shares of Coreweave (CRWV) and Oracle (ORCL), which have fallen 45% and 39% from recent highs, respectively. But it all depends on when you bought in.

The strategy isn't necessarily for everyone. If you plan on holding your assets for a long time, it may be best not to sell, as you could miss potential upside in the near term.

Ultimately, it is recommended that you consult a financial advisor. But if your investing journey didn't go quite according to plan in 2025, tax-loss harvesting could be one way to turn a negative into a positive as we head into the new year.