Universal Year-End Moves (Everyone)
Max your 401(k) contribution. The 2026 limit is $23,500 ($31,000 with age 50+ catch-up). Any contribution must be made via payroll deduction by your last paycheck of the year. If you're behind, ask HR if you can do a one-time large deduction from December's paycheck. Some employers allow 'true-up' matching that catches up partial-year contributions.
Max your HSA. The 2026 limit is $4,400 single / $8,750 family / $1,000 catch-up if age 55+. Unlike 401(k), HSA contributions can be made up to the tax filing deadline (April 15 of next year) for the prior tax year. But making them by December 31 simplifies tracking and ensures the amount is tax-deductible for the current year.
Make Traditional IRA contributions. 2026 limit is $7,000 / $8,000 catch-up. Like HSAs, can be made until April 15 deadline, but year-end contributions are clean. If you're using the Backdoor Roth strategy, do the contribution and conversion before year-end to keep the timing tidy.
Review your W-4 withholding. If you're significantly over- or under-withheld for the current year, adjust for next year. Use Form W-4 Step 4(c) to add extra withholding per paycheck. If you owed a large amount this year, increase withholding to avoid underpayment penalty next year. If you got a huge refund, decrease withholding to put more in your pocket throughout the year.
Investment Account Year-End Moves
Tax-loss harvesting. Sell investments at a loss to offset realized gains plus up to $3,000 of ordinary income. Excess losses carry forward indefinitely. Watch wash sale rules — don't repurchase substantially identical securities within 30 days. Use replacement securities (e.g., VOO → IVV) to maintain market exposure.
Tax-gain harvesting (if in 0% LTCG bracket). If your taxable income is below $48,350 single / $96,700 MFJ for 2026, your long-term capital gains face a 0% federal rate. Sell appreciated stock, immediately rebuy (no wash sale rule for gains), step up your basis tax-free.
Charitable contribution timing. Cash donations must be made by December 31. Donor-Advised Fund contributions count when made to the DAF (you can distribute to specific charities later). Consider bunching charitable giving to itemize this year if the standard deduction would otherwise win — multiple years of giving in one year often produces better tax outcomes than evenly spread giving.
Donate appreciated stock instead of cash. If you have stock with $20K basis worth $50K in your taxable account, donating directly to charity gives you a $50K deduction AND avoids the $30K capital gain. Net benefit: 25-40% better than donating cash and selling stock separately.
Capital gain distributions. Mutual funds and ETFs distribute capital gains in November-December. If you're considering buying a fund near year-end, wait until after the distribution date to avoid 'buying the distribution' (paying tax on gains realized before you owned the fund).
Self-Employed Year-End Moves
Solo 401(k) and SEP-IRA contributions. Solo 401(k) employee deferrals must come from year-end self-employment income — make the contribution decision by December 31 to be safe (the actual transfer can happen up to your tax filing deadline plus extensions). SEP-IRA can be contributed up to your tax filing deadline.
Defer income / accelerate expenses. If you're a cash-basis business and expect to be in a higher bracket next year, accelerate income and defer expenses. If expecting lower next year, defer income (e.g., bill clients in late December for January payment) and accelerate expenses (prepay business expenses that will benefit current operations).
Section 179 / bonus depreciation. Equipment purchases placed in service by December 31 qualify for current-year depreciation deductions. Section 179 immediate expensing (up to $1.16M for 2026, fully phased out at $2.89M of total purchases) and bonus depreciation can provide large deductions for businesses with year-end equipment needs.
Pay outstanding 1099 vendors. Cash-basis deductions require the expense to be paid (not just incurred) by December 31. Pay outstanding bills, contractor invoices, and service fees before year-end to capture the deduction in current year.
Health insurance: self-employed health insurance deduction is available above-the-line. Make sure your premiums are paid for the year — some payment plans extend into January and may not count for current year.
High Earner Year-End Moves ($200K+)
Mega Backdoor Roth maximization. If your 401(k) plan supports after-tax contributions and conversions, ensure you've maxed out the gap between your elective deferral + employer match and the $69,000 total 401(k) limit. After-tax contributions must be made via payroll by year-end.
Roth conversion timing. If you're below the 32% bracket and approaching it, consider converting Traditional IRA to Roth before crossing into higher brackets. The 32% bracket starts at $203,300 single / $406,550 MFJ. Convert up to that line.
Watch IRMAA brackets. Income for 2026 affects 2028 Medicare premiums (2-year lookback). Crossing IRMAA thresholds adds $876+ per year of premium per person. Cliffs at AGI thresholds — even $1 over a threshold triggers the next tier.
NIIT planning. Net Investment Income Tax (3.8%) applies above $200K single / $250K MFJ MAGI. Strategic timing of investment income, capital gains, and Roth conversions can keep you below the threshold in some years and accept the threshold in others — 'lumpy' the income exposure.
Estate gift planning. The 2026 annual gift tax exclusion is $19,000 per donor per recipient. Year-end is the deadline. If you have 5 family members you regularly support and you're worth $5M+, gifting to all 5 by Dec 31 removes $95,000 ($190K MFJ) from your estate without using lifetime exemption.
Charitable bunching with DAF. Contribute multiple years of charitable giving to a DAF in one year, get the immediate deduction, distribute to actual charities over the following years. Especially valuable if your other itemized deductions barely exceed the standard deduction.
Retiree Year-End Moves
Required Minimum Distributions (RMDs). If you're 73+ (or 75 starting in 2033 under SECURE 2.0), RMDs must be taken by December 31. Failing to take RMD triggers a 25% penalty (reduced from 50% under SECURE 2.0). Schedule RMDs in November to avoid year-end procrastination problems.
Qualified Charitable Distributions (QCDs). If 70½+, send up to $108,000 (2026, indexed) directly from your IRA to qualified charities. The QCD counts toward your RMD but is excluded from AGI — bypassing the SS taxation formula and IRMAA brackets entirely. Often the most tax-efficient charitable giving for retirees.
Roth conversion timing. Pre-RMD years (typically 60-72) are prime conversion windows. Convert up to your bracket cap each year. Once RMDs begin, conversion adds to RMD-driven income, often pushing you into higher brackets and making conversion less attractive.
Capital gain harvesting in 0% bracket. Many retirees with primarily Social Security and Roth income are in the 0% LTCG bracket. Harvest gains tax-free up to the bracket cap each year ($48,350 single / $96,700 MFJ for 2026 taxable income).
ACA subsidy management (if pre-Medicare). If you're on ACA marketplace insurance and managing your AGI for subsidies, year-end is the last opportunity to adjust. Roth conversions, capital gain timing, and HSA contributions all affect MAGI.
What NOT to Do at Year-End
Don't accelerate income just to 'use up' the standard deduction. The standard deduction applies regardless. Accelerating income simply pushes more income into the current year at potentially higher rates.
Don't make small charitable contributions if you're firmly taking the standard deduction. They provide zero benefit unless your itemized total exceeds the standard. If you give $5K/year and your other itemized deductions are $20K (with $32K standard for MFJ), the $5K provides $0 of marginal tax benefit. Save for bunched giving in alternating years.
Don't trigger short-term capital gains by selling in December if you're 11+ months into a holding. Wait the additional weeks for long-term treatment. The bracket difference (e.g., 32% short-term vs 15% long-term) is enormous on large gains.
Don't make sudden 'tax-driven' transactions if you don't understand the implications. The wash sale rule, AMT exposure on ISO exercise, and IRA pro-rata calculations all create tax pitfalls. Last-minute December tax moves without consultation can produce worse outcomes than doing nothing.
Don't forget state tax. Most year-end planning focuses on federal taxes, but state tax adds 5-13% in high-tax states. State implications of Roth conversions, capital gain timing, and other moves should be modeled too.