9 Year-End Tax Moves I'm Making Before December 31, 2026

Every December, somebody in my family texts me a version of the same question: "Is it too late to do anything about my taxes?" My answer is always the same. For most moves, the deadline is not April 15. It is December 31.

Taxes on investments, retirement contributions through payroll, charitable gifts and Roth conversions all lock in on the calendar year. Once the ball drops in Times Square, your options shrink dramatically. Benjamin Franklin famously wrote that nothing is certain "except death and taxes," but he left out that the size of the tax bill is surprisingly negotiable if you start in October.

This year matters more than most. The One Big Beautiful Bill Act (OBBBA) changed several rules that take effect for the 2026 tax year, including new charitable deduction rules, a higher state and local tax (SALT) cap, and a bigger dependent care FSA. Below are the nine moves we are making before year-end, with the numbers behind each one.

The 2026 Numbers I'm Working With

Before I make any move, I write down the limits for the current year:

Sources: IRS Notice 2025-67 via 401(k) Specialist, Franklin Templeton's OBBBA summary, and the IRS newsroom.

1. Harvest Investment Losses (Without Tripping the Wash-Sale Rule)

Tax-loss harvesting means selling an investment in a taxable brokerage account that is worth less than you paid, so the realized loss can offset gains elsewhere.

The rules are straightforward:

• Losses first offset capital gains.
• If losses exceed gains, you can deduct up to $3,000 against ordinary income.
• Anything left over carries forward to future years indefinitely.

2026 has been a strange market. The S&P 500 is up meaningfully for the year, but leadership has been narrow. Data tracked by ChartRow as of early October showed only 297 of 498 S&P 500 stocks in positive territory year-to-date, with some former favorites down more than 50%. That means plenty of investors hold a few losers worth harvesting even in a good year.

The trap: the wash-sale rule. If you buy the same or a "substantially identical" security within 30 days before or after the sale, the IRS disallows the loss. That window applies across accounts, including your IRA and your spouse's accounts.

How we handle it: we swap into a similar but not identical fund. Selling one S&P 500 index fund at a loss and buying a total market fund, for example, keeps us invested while respecting the rule. We put a reminder in the calendar 31 days out before swapping back, if we swap back at all.

2. Or Harvest Gains at 0% If Your Income Is Low This Year

Here is the move nobody talks about. If your taxable income is low this year (a sabbatical, a layoff, early retirement, a year of school), you might qualify for the 0% long-term capital gains rate.

For 2026, the 0% bracket covers taxable income up to roughly $49,000 for single filers and roughly $98,000 for married couples filing jointly. If you fall under that line, you can sell appreciated investments held over a year, pay nothing in federal tax on the gain, and immediately buy them back. The wash-sale rule does not apply to gains.

The result is a higher cost basis, which means a smaller tax bill when you sell for real years from now. We did this the year my spouse went back to school, and it reset the basis on a chunk of index funds for free.

3. Max Out the 401(k) With Your Last Few Paychecks

Payroll 401(k) contributions have to come out of 2026 paychecks to count for 2026. Unlike an IRA, you cannot make them in April.

I log into payroll in October and do a quick calculation:

Remaining room = $24,500 - year-to-date contributions Divide by remaining paychecks = target per check

If we are behind, I bump the percentage for November and December. One warning: if your employer matches per paycheck rather than annually, front-loading or back-loading can cost you match dollars. Check whether your plan has a "true-up" provision.

If you are 50 or older, add the $8,000 catch-up. If you turn 60, 61, 62 or 63 this year, the enhanced catch-up is $11,250, which makes it possible to shelter $35,750 in 2026. One new wrinkle: starting this year, higher earners must make catch-up contributions as Roth money, a change SuperMoney highlighted in its limits coverage.

Next year's limit is still pending. Milliman's actuaries told 401(k) Specialist the 2027 cap should rise to either $25,000 or $25,500, depending on September inflation data.

4. Consider a Partial Roth Conversion

A Roth conversion moves money from a traditional IRA or 401(k) into a Roth account. You pay ordinary income tax on the converted amount now, and in exchange the money grows tax-free and comes out tax-free in retirement, with no required minimum distributions for the original owner.

Conversions make the most sense when:

• Your income is unusually low this year.
• You expect to be in a higher bracket later (big pension, large RMDs, or a surviving spouse filing single).
• You can pay the tax from cash outside the retirement account.

Our approach is "bracket filling." We estimate taxable income for the year, figure out how much room is left in our current bracket, and convert just enough to fill it without spilling into the next one. Converting a few thousand dollars at 12% or 22% today can avoid a much higher rate later.

Conversions must be completed by December 31, and they cannot be undone, so I run them in mid-December once our income picture is clear.

5. Rethink Charitable Giving Under the New 2026 Rules

This is where OBBBA changed the most for everyday givers, and it pays to understand the new structure.

If you take the standard deduction: starting in 2026, you can deduct up to $1,000 of cash gifts to qualifying charities, or $2,000 for married couples filing jointly, even without itemizing. Bank of Texas describes this as an above-the-line deduction, so non-itemizers finally get some credit. One catch: it generally does not apply to gifts to donor-advised funds.

If you itemize: two new limits apply.

• A 0.5% floor: only gifts above 0.5% of your adjusted gross income count. Law firm Holland & Knight gives a clear example: with $500,000 of AGI and a $20,000 gift, the first $2,500 is not deductible.
• A 35% cap on the tax benefit for those in the top 37% bracket.

What we are doing: because we are close to the standard deduction line, we use a strategy called bunching. Instead of giving the same amount every year, we combine two or three years of planned giving into one year to clear the itemizing threshold, then take the standard deduction (plus the new $2,000 cash deduction) in the off years.

If you are 70 and a half or older: a qualified charitable distribution (QCD) sends money straight from your IRA to charity. It counts toward your RMD, never shows up in your income, and is not subject to the new 0.5% floor because it is not an itemized deduction at all.

6. Use the Higher SALT Cap to Decide Whether to Itemize

For years the state and local tax deduction was capped at $10,000. OBBBA raised it to $40,000 starting in 2025, and the cap rises to $40,400 for 2026, according to Franklin Templeton. It phases down for modified AGI above $505,000 and drops back to $10,000 once MAGI passes about $606,333.

For homeowners in high-tax states, this changes the math. Property taxes plus state income tax plus mortgage interest might now clear the $32,200 standard deduction for married couples.

Year-end move: if you are near the line, you may be able to pull deductions into 2026 by paying your January property tax bill in December (only if it has been assessed) or making your fourth-quarter state estimated payment before December 31. Run it through tax software first. Prepaying only helps if you actually itemize.

7. Spend Down (or Plan) Your FSA and Check Your HSA

Health FSA money is mostly use it or lose it. Check your balance now and schedule the eye exam, refill prescriptions, or buy the eligible supplies you need. Your plan may allow a small carryover or a grace period into early 2027, but do not assume it.

On the HSA side, you have until the tax filing deadline to contribute for 2026. Still, I like to finish in December through payroll, because payroll contributions avoid the 7.65% FICA tax that a direct contribution does not.

Parents should note that the dependent care FSA limit rose to $7,500 this year. If you underestimated your 2026 election, you can raise it for 2027 during open enrollment.

8. Take Your Required Minimum Distributions on Time

If you are 73 or older, or you inherited an IRA that requires annual withdrawals, your required minimum distribution (RMD) must come out by December 31. The penalty for missing one is 25% of the shortfall (reduced to 10% if corrected quickly).

Two tips we use for our parents:

• Do not wait until the last week of December. Custodians get swamped.
• If you give to charity anyway, route part of the RMD as a QCD so it does not raise your taxable income or push up your Medicare premiums.

9. Make Gifts and Fund 529 Plans

The annual gift tax exclusion is $19,000 per recipient in 2026. A married couple can give $38,000 to each child or grandchild without filing a gift tax return. These are use-it-or-lose-it each calendar year.

We pair this with 529 college savings plans. More than 30 states offer a state income tax deduction or credit for contributions, and many require the deposit by December 31 to count for the year. Some plans also allow "superfunding," or front-loading five years of gifts at once.

My Year-End Tax Calendar

Here is when I actually do each step:

• Mid-October: check 401(k) progress and adjust payroll percentage.
• November: open enrollment; set FSA, dependent care and HSA amounts for 2027.
• Late November: review taxable accounts for loss or gain harvesting.
• Early December: finalize charitable plan and make gifts.
• Mid-December: estimate full-year income, then decide on a Roth conversion.
• By December 20: confirm RMDs and QCDs are processed.
• December 31: done. Pour something festive.

The Bottom Line

The new 2026 rules reward people who plan instead of react. A non-itemizer can now deduct up to $2,000 of cash gifts. Homeowners in high-tax states may itemize for the first time in years. Workers in their early 60s can shelter more than ever in a 401(k). None of that helps if you discover it in April.

Pick two or three moves from this list that fit your situation, put them on the calendar, and finish them before the year runs out. That is exactly what we are doing in our house this fall.

This article is for educational purposes only and is not tax advice. Tax rules depend on your full situation, so consider talking with a CPA or enrolled agent before making large moves like Roth conversions or charitable bunching.