Year-End Tax Planning Checklist

By Tom, CPA · Updated October 27, 2026

Part of: Tax Planning

TL;DR: Project your 2026 tax in November, then act on items with a December 31 deadline: 401(k) deferrals, Roth conversions, RMDs, loss harvesting, gifts and equipment placed in service.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

December is when the tax year stops being theoretical. On January 1, most of your options for 2026 turn into pumpkins: no more harvesting losses for the year, no more Roth conversions for the year, no more 401(k) deferrals from 2026 paychecks. The tax code is 4 million words long; you need about 400 of them to run a year-end sweep that catches the moves worth making and skips the ones that only feel productive.

This checklist covers income timing, retirement contributions, investment moves, charitable giving, the new 2025 law deductions, required distributions, and business and landlord items. Limits are for 2026, as of Oct 2026, per IRS releases. Run it in November, not on December 30, because custodians and charities need processing time.

CPA Warning Label: Many moves cut one tax and raise another (IRMAA, credits, phaseouts). Model the whole return before acting.

Step 1: Project your 2026 tax

• Pull year-to-date pay stubs, brokerage realized gain/loss reports and any business profit-and-loss.
• Estimate total income and run it through tax software or last year's return as a template.
• Find your marginal bracket. For 2026, single filers hit 22% above $50,400 of taxable income and 24% above $105,700; married filing jointly, 22% above $100,800 and 24% above $211,400.
• Note any cliff or phaseout you are near: IRMAA, the premium tax credit, Roth IRA eligibility, the QBI threshold ($201,750 single, $403,500 joint), or the Schedule 1-A phaseouts.
• Compare withholding and estimates with the projection. If short, increase withholding for the last paychecks; withholding counts as paid evenly through the year. See the estimated tax penalty.

Step 2: Retirement accounts

• Raise 401(k) deferrals for remaining paychecks if you are under the limit and want the deduction.
• Starting in 2026, catch-up contributions must be Roth if prior-year wages from that employer exceeded $150,000, per the IRS.
• Roth conversions must be completed by December 31. Fill the bracket deliberately; see Roth conversion planning and the Roth five-year rules.
• RMDs: take required minimum distributions by December 31 (the first one can wait until April 1 of the next year, but then two land in one year). Inherited IRAs under the 10-year rule may require annual RMDs too.

Step 3: Investments

• Harvest losses in taxable accounts to offset gains and up to $3,000 of ordinary income. Mind the wash sale rule; see loss harvesting mistakes.
• Harvest gains if you are in the 0% long-term capital gains bracket.
• Check mutual fund distributions before buying funds in taxable accounts in December.
• Review short- vs long-term holding periods before selling; a few days can change the rate.

Step 4: Charitable giving under the new rules

• Starting in 2026, non-itemizers can deduct up to $1,000 ($2,000 joint) of cash gifts to qualifying charities, per the IRS. Gifts to donor-advised funds do not count for this.
• Itemizers face a new floor starting in 2026: only charitable contributions above 0.5% of AGI are deductible, under the 2025 law. That makes bunching into one year more attractive.
• Donate appreciated stock held over a year instead of cash to avoid the capital gain.
• Age 70½+? A qualified charitable distribution from an IRA counts toward RMDs and stays out of AGI.
• Get written acknowledgments for gifts of $250 or more before you file.

Step 5: New 2025-law deductions

• Tips and overtime: keep pay records; the qualified amounts should appear on W-2s or statements. See no tax on tips and overtime.
• Car loan interest: if you bought a new qualifying vehicle with a loan, keep the VIN and the lender's interest statement. See the car loan interest deduction.
• Senior deduction: age 65+ by year-end gets up to $6,000 per person, phased out above $75,000 MAGI ($150,000 joint). Managing MAGI with Roth conversions or gain timing may preserve it; see the senior deduction.

Step 6: Family and health

• Use up FSA balances (health FSA carryover is capped at $680 for plans that allow it in 2026).
• Make annual-exclusion gifts of up to $19,000 per recipient by December 31.
• Fund 529 plans if your state gives a deduction by year-end.
• Pay deductible medical bills if you will itemize and clear the 7.5% of AGI floor.
• Review your filing status if you married, divorced or had a child; see our filing status guide.

Step 7: Business owners and landlords

• Place equipment in service by December 31 to depreciate it for 2026; buying is not enough. Section 179 is up to $2,560,000 for 2026.
• S corp owners: run final payroll so reasonable salary is set, and reimburse accountable plan expenses; see accountable plans.
• Cash-basis businesses can time invoices and payments within reason.
• Landlords: review repairs vs improvements, and log hours if you rely on material participation or real estate professional status. First-year landlords should read first-year landlord taxes, and anyone with paving or fencing work should check 15-year land improvements.

Step 8: Life decisions

If you are weighing retirement timing, consider income in the final working year versus the first retirement year; see one more year syndrome. A January retirement date can mean a year of low income ideal for conversions. Also review whether a bonus or stock vesting can move between years, and whether a home sale closing date in late December or early January changes which year's brackets apply.

Illustration:

Dana, 52, single, expects $140,000 of wages in 2026 with $16,000 deferred to a 401(k) so far. Taxable income is projected around $108,000, just above the $105,700 start of the 24% bracket.

• Increase 401(k) deferrals by $16,500 over the last paychecks to reach $24,500 + $8,000 = $32,500. Taxable income drops to about $91,500, saving roughly $3,700 (about $2,300 x 24% plus $14,200 x 22%).
• Harvest a $3,000 loss in the taxable account, saving another $660 at 22%.
• Donate $600 cash; Dana takes the standard deduction, so the new non-itemizer deduction applies.

Illustrative only, ignoring state tax.