Year-End Tax Planning Strategies for 2026

The last quarter of the year is your final opportunity to take action that can meaningfully reduce your tax liability. Here are the most impactful strategies to consider before December 31.

Maximize Retirement Contributions

Contributing the maximum to tax-advantaged retirement accounts is one of the most effective tax-saving strategies available. For 2026, contribution limits are:

• 401(k): $23,500 ($31,000 if age 50 or older)
• Traditional or Roth IRA: $7,000 ($8,000 if age 50 or older)
• SEP-IRA: Up to 25% of net self-employment income, maximum $69,000
• Solo 401(k): Up to $69,000 ($76,500 if age 50 or older)

Harvest Tax Losses

Review your investment portfolio for positions with unrealized losses. Selling these investments before year-end allows you to offset capital gains dollar for dollar, and up to $3,000 in ordinary income. Be aware of the wash-sale rule, which prohibits repurchasing substantially identical securities within 30 days.

Bunch Charitable Donations

If your itemized deductions are close to the standard deduction threshold, consider 'bunching' two years' worth of charitable contributions into a single year to exceed the standard deduction. Donor-advised funds make this strategy especially convenient.

Review Business Expenses

If you own a business, consider accelerating deductible expenses into the current year. Purchase needed equipment, pay January invoices early, or prepay deductible expenses like insurance premiums or professional subscriptions.

Plan for Required Minimum Distributions

If you're age 73 or older, ensure you've taken your required minimum distribution (RMD) from traditional IRAs and employer retirement plans. The penalty for missing an RMD is 25% of the amount not withdrawn.