Smart Tax Moves Professors Can Make Before Filing
Tax season is more than gathering forms. January through the filing deadline can serve as a valuable window to make strategic moves that may impact last year’s tax bill. For university professors, whose income often includes W‑2 wages and academic or consulting payments, this period can offer tax-optimizing opportunities. Here are four key areas to consider before hitting “submit.”
1. Accounts You Can Fund Until Tax Filing
The IRS allows you to fund certain tax‑advantaged accounts for the prior year until the tax filing deadline. For many professors, this flexibility is particularly helpful since income can fluctuate due to summer salary, grants, bonuses, or consulting work.
Traditional and Roth IRAs are two of the most common accounts in this window. If your income allows it, you can make a prior‑year IRA or Roth IRA contribution (2025 limit $7,000, with an extra $1,000 catch‑up for those age 50+). Because IRA eligibility and Roth availability are based on income phase‑outs, the January through April window lets you finalize your prior‑year income and determine whether you qualify for these contributions.
You can also fund a health savings account (HSA) for the prior year if you were covered under a qualifying high-deductible health plan. HSA contributions can potentially offer tax advantages. They offer pre‑tax contributions, tax‑free growth, and tax‑free withdrawals for qualified medical expenses.
2. For Professors with Self‑Employment Income
Many professors earn self‑employment income from consulting, speaking, manuscript reviews, expert panels, tutoring, or research‑related work. This income may qualify for additional tax‑saving opportunities.
University professionals can fund a SEP IRA up to the business tax filing deadline (including extensions) and can potentially reduce taxable self‑employment income. This flexibility makes it especially valuable for professors whose consulting income varies. While some professors may use a Solo 401(k) for their self-employment income, they can often receive employer contributions for the prior year during tax season.
This is also an ideal time to gather business expense receipts for your form Schedule C. Expenses such as professional dues, research supplies, software, conference travel, continuing education, mileage, and home‑office costs (if eligible) may help reduce taxable income. For professors who receive grant‑funded travel or research reimbursements, it’s especially important to distinguish between expenses the university reimbursed and expenses you paid personally. Only the latter may qualify as deductible business expenses for your Schedule C. Remember that proper documentation is essential and may impact your final tax bill.
3. If You Have Children or Grandchildren: Consider a 529 Contribution
If your state allows it, contributing to a 529 college savings plan before the tax filing deadline may allow you to claim a prior‑year state tax benefit. Not every state offers this feature and some don’t offer any deductions, so be sure to confirm your state’s rules.
For those who qualify, this may reduce taxable income while also supporting your children’s or grandchildren’s future education costs.
4. More People Can Itemize Under New Tax Rules: Gather Your Documents
As part of the 2025 One Big Beautiful Bill Act, the cap on state and local tax (SALT) deductions increased significantly. As a result, more households may start itemizing their deductions. Because many taxpayers haven’t itemized since 2017, this is a good time to review what you paid last year and gather documentation to determine whether itemizing makes sense.
Common itemized deductions include charitable contributions (keep receipts for all 2025 gifts), mortgage interest (reported on Form 1098), medical expenses above 7.5% of adjusted gross income, and state and local taxes (including income taxes, real estate taxes, and personal property taxes). Pulling these together now can help ensure you don’t miss valuable deductions.
Even though 2025 is over, several actionable items can still affect your final tax bill. If you’re unsure which of these strategies may apply to your situation, consider speaking with a financial advisor who specializes in academic professionals to help you identify any opportunities before you file.
Savant University Wealth Management (“Savant”) is an SEC registered investment adviser headquartered in Rockford, Illinois serving clients in academia nationally. Our advisers have specific and in-depth knowledge about university employee benefit programs and retirement plans. We work with university faculty, physicians, and other professionals. We are not associated with any university or any retirement vendor, and we have no access to your private retirement or personnel information. Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. A copy of our current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.savantwealth.com.
Noah J. Tostrud
Financial Advisor
CFP®