Stop Over-Tipping Uncle Sam: 4 Legal Ways Keene Professionals Can Strategically Reduce Taxes

Still feeling the sting of April 15th? You’re not alone. For busy professionals in Keene and throughout the Monadnock region, tax season brings with it stress, anxiety, and uncertainty. Between federal obligations and all the paperwork, you may have wondered: “Am I paying more than I should?”

The answer might surprise you. Every year, countless successful local professionals unknowingly leave money on the table simply because they haven’t implemented a strategic tax plan.

The good news? 

Mid-year marks a great time to stop merely “hoping for the best” and start planning how to reduce your taxes legally in 2025. From the repeal of New Hampshire’s Interest and Dividends Tax to targeted federal strategies, there are powerful ways to help reduce burden — without cutting corners.

Why Mid-Year Tax Planning Matters in NH 

New Hampshire earned income isn’t taxed, but that doesn’t mean tax planning in Keene, NH, is simple. In fact, 2025 marks a major shift for investors in the Granite State. As of January 1, 2025, the long-awaited repeal of the interest and dividends tax went into full effect, meaning you’re no longer paying 5% on investment income over $2,400 ($4,800 for joint filers). The repeal creates a unique opportunity for investors to reinvest those savings — or redirect those funds into strategies designed to lower overall liability.

Additionally, with the June 15 estimated payment deadline approaching, now is the perfect time to adjust your quarterly payments and implement changes that could impact your entire tax year.

The bottom line: Six months of intentional planning now can help you potentially keep more money in your pocket next April 15th. With that, it’s essential to note that while these strategies can be powerful, the most effective way to find a plan that suits your unique situation is to work with a team of professional advisors. They can help you navigate the complexities, avoid costly mistakes, and ensure your strategies work together seamlessly.

1. Max Out Tax-Advantaged Retirement Accounts

This isn’t new advice, but it’s still one of the most overlooked. Contributing to retirement accounts remains one of the simplest and most effective ways to reduce your taxes legally.

Options to Consider:

• 401(k): Contributions up to $23,500 ($31,000 if you’re 50+)
• Solo 401(k) (for self-employed): Up to $70,000 ($77,500 if you’re 50+)
• Traditional/Roth IRA: $7,000 ($8,000 if you’re 50+)
• SEP-IRA (for business owners): Up to $70,000 or 25% of compensation

If your employer offers a match, contribute at least enough to receive the full amount, capitalizing on essentially free money. Additionally, if you’re concerned about cash flow, remember you have until December 31 to make 401(k) contributions and until April 15, 2026, for IRA contributions.

2. Leverage Other Tax-Advantaged Accounts: HSAs and 529s

New Hampshire’s elimination of the Interest and Dividends Tax in 2025 makes growth without taxes even more valuable. Two accounts can potentially offer significant advantages:

Health Savings Accounts (HSAs)

Some requirements for an HSA include:

• Must be enrolled in a high-deductible health plan (HDHP)
• 2025 limits: $4,300 (individual) / $8,550 (family) / +$1,000 catch-up if age 55+
• Funds can be used tax-free for out-of-pocket healthcare expenses, including Medicare premiums in retirement.

After age 65, you can withdraw HSA funds for any purpose penalty-free (though you’ll pay ordinary income taxes on non-medical withdrawals). This makes HSAs excellent retirement accounts for healthcare costs.

529 Education Savings Plans

• Contributions grow tax-free and can be withdrawn for qualified education expenses.
• Anyone can contribute to a child’s 529, including parents, grandparents, family, and friends.
• New in 2024: Up to $35,000 can be rolled from a 529 to a Roth IRA under specific rules.

Additionally, you can now use 529 funds for K-12 tuition (up to $10,000 annually) and apprenticeship programs.

3. Optimize Investment Location & Use Tax-Loss Harvesting

Where you hold your investments matters. Optimizing investment location and realizing strategic losses can lower your overall liability.

Investment Location Strategies:

• Place high-interest bonds and REITs inside tax-deferred accounts.
• Hold long-term growth stocks in taxable accounts to benefit from favorable capital gains treatment.
• Consider municipal bonds for tax-free income at the federal level.

Tax-Loss Harvesting Strategies:

• Review taxable investment accounts for losses.
• Sell underperforming assets before year-end to offset gains.
• Use up to $3,000 in losses to offset ordinary income each year; carry forward additional losses to future years.

It’s important to note that when leveraging the tax-loss harvesting strategy, avoid the “wash sale” rule by waiting 31 days before repurchasing the same investment or buy a similar (but not identical) investment immediately.

4. Leverage State-Specific Breaks & Property Tax Offsets

New Hampshire’s unique economic landscape creates specific opportunities for residents to better support their financial strategies:

Capitalize on the Interest & Dividends Tax Repeal

The money you previously set aside for this tax can now potentially be redirected into:

• Additional retirement contributions
• HSA funding
• Charitable giving to increase federal deductions

Bunch Charitable Contributions

• Combine multiple years of giving into one tax year to surpass the standard deduction.
• Use donor-advised funds for flexibility and impact.

Property Tax Relief in NH:

• Seniors over 65 may qualify for exemptions under the Elderly Exemption program
• Low- and moderate-income homeowners may be eligible for tax rebates through local municipal programs.

An added bonus: gifting strategies and charitable donations can also support estate and legacy planning for New Hampshire residents.

Schedule a Free Consultation with Birch Financial Group Today

At Birch Financial Group, our tax planning process is designed to be clear, collaborative, and tailored to your life—not just your numbers. Whether you’re fine-tuning your 2025 strategy or looking for ways to make the most of New Hampshire’s evolving tax landscape, we’ll help you uncover opportunities, identify pitfalls, and move forward with clarity. 

Ready to explore what’s possible? Schedule a free 30-minute consultation with a CFP® professional today.