What Issues Should I Consider Before the End of the Year?

Start with your taxable accounts. If you're sitting on unrealized losses, decide whether to harvest them to offset realized gains elsewhere, or to use up to $3,000 of net losses against ordinary income, with any excess carrying forward to future years. If you hold funds that pay year-end capital gain distributions, check the estimated distribution amounts before mid-December, since selling ahead of a distribution date (or deciding not to) can meaningfully change what you owe on a position you didn't even trade.

If you're subject to RMDs, including from an inherited IRA, don't assume the rules work the same across every account. RMDs from multiple traditional IRAs can be aggregated and taken from just one of them. RMDs from an inherited IRA cannot be combined with RMDs from your own IRAs, they have to be tracked and satisfied separately. Employer plans like 401(k)s generally require a separate calculated distribution from each plan, with no aggregation allowed, except 403(b) plans, which can be aggregated among themselves the same way IRAs can. Getting this wrong doesn't just create paperwork, it creates a missed distribution and a penalty on an account you thought was covered by a withdrawal from a different account.

Where you sit relative to this year's bracket thresholds should drive every other decision on this list. For 2026, taxable income below $201,775 (single) or $403,550 (MFJ) keeps you at or under the 24% marginal bracket, with the next dollar taxed at 32%. Long-term capital gains above $545,500 (single) or $613,700 (MFJ) get taxed at the higher 20% rate instead of 15%. If your MAGI is above $200,000 (single) or $250,000 (MFJ), the 3.8% Net Investment Income Tax applies to the lesser of your net investment income or the amount over that threshold. And if you're on Medicare, IRMAA surcharges are based on income from two years prior, so a decision made this December can raise your Medicare premiums in 2028. Knowing which side of these lines you're on before you realize more gains or convert more of an IRA changes whether a given move helps or costs you.

If you expect your income to rise in future years, this is the year to lean into Roth: Roth IRA and Roth 401(k) contributions, Roth conversions, after-tax 401(k) contributions if your plan allows them, and if you're 59.5 or older, accelerating traditional IRA withdrawals to fill up a bracket that's cheaper today than it will be later. If you expect income to fall instead, the logic flips, traditional contributions now capture a deduction at today's higher rate rather than locking in Roth treatment you don't need yet.

Charitable giving has more structure to it than just writing a check. Gifting appreciated securities avoids the capital gain you'd otherwise realize by selling first, and a Qualified Charitable Distribution direct from an IRA works if you're 70.5 or older, satisfying an RMD without adding to your taxable income at all. If you expect to take the standard deduction this year ($16,100 single, $32,200 MFJ for 2026), bunching several years of giving into one year, often through a donor-advised fund, can push you over the itemization threshold in that one year even though you wouldn't clear it annually.

If you're expecting a windfall this year, an inheritance, RSU vesting, exercised stock options, or a bonus, check your withholding now rather than in April. A large enough increase can trigger an estimated payment requirement, and the underpayment penalty accrues from the quarter the income was received, not from when you eventually notice it on your return.

Business owners have their own year-end list layered on top of the personal one. If you run a pass-through entity, confirm your Qualified Business Income Deduction eligibility before assuming you'll get it automatically. Weigh Roth versus traditional retirement plan contributions for their effect on both your taxable income and your QBI calculation, the two don't always move in the same direction. Decide whether to accelerate or defer deductible business expenses based on which year needs the deduction more. And if you're opening a new retirement plan for the business, most plan types have to be established before year-end if you're on a calendar tax year, solo 401(k)s and SEP IRAs are the exceptions that can still be opened after January 1 for the prior year.

A few savings and benefit deadlines round things out. HSA contribution limits for 2026 are $4,400 for self-only coverage and $8,750 for family coverage, plus an additional $1,000 if you're 55 or older. The maximum 401(k) salary deferral is $24,500 plus any applicable catch-up. For 529 accounts, you can gift up to $19,000 per beneficiary per year tax-free, or front-load up to $95,000 in a single year and elect to spread it over five years for gift tax purposes, and unused 529 balances may be eligible for a limited rollover into the beneficiary's Roth IRA. If you have an FSA balance, check your specific plan's rules: some allow up to $680 to roll into next year, some offer a grace period into mid-March, and most give a window after year-end to submit receipts, don't assume the balance just evaporates on January 1 without checking first. And if you've already met your health plan's annual deductible, consider scheduling any elective care you've been putting off before the deductible resets.

Finally, check whether anything changed this year that your estate plan or gift strategy hasn't caught up to yet. A change in marital status, a new heir, or a major asset purchase or sale all warrant a look at your existing documents. Any gifts you intend to make this year, up to the $19,000 per-person annual exclusion, have to be completed by December 31 to count for this tax year. And if you have kids approaching college, this is also the year to think about how reducing income in a specific year might improve a financial aid package the following year.

None of these items exist in isolation, and running through them in the wrong order can undo the benefit of doing them at all. Figure out where your taxable income actually lands relative to the bracket and NIIT thresholds first, then layer tax-loss harvesting, Roth conversions, and charitable strategy on top of that number, not the other way around. A Roth conversion that looks attractive in isolation can push you into IRMAA territory or the 20% capital gains tier if you haven't already accounted for a big December distribution.

Set a real internal deadline in early December, not December 31, for anything that requires a phone call, a form, or a custodian's processing time: RMDs, Roth conversions, tax-loss sales, and 529 contributions all take a few business days to actually settle. Waiting until the last week of the year turns a routine planning decision into a scramble against a custodian's own internal cutoff, which is often earlier than the IRS deadline itself.

• Assuming an RMD from one account automatically covers an inherited IRA or employer plan RMD, when aggregation rules don't allow it across those account types.
• Realizing a gain or doing a large Roth conversion without first checking where it lands relative to the NIIT threshold, the 20% capital gains bracket, or an IRMAA tier.
• Treating the FSA balance as if it always disappears December 31, without checking whether the plan offers a rollover or grace period.
• Waiting until April to make a charitable contribution, Roth conversion, or gift for the prior year, none of which can be completed after December 31.
• Opening a new business retirement plan in the new year and assuming it still counts for the prior tax year, when only solo 401(k)s and SEP IRAs get that flexibility.