Tax planning · November 2026 · for the return you file in 2027
End of Year Tax Planning
The end of the year is the one time taxes can still be changed. After December 31, your 2026 return is just a record of what you did. Pick a group, open the questions that sound like you, and bring the ones you can’t answer to a year-end planning session.
Seven groups, twenty-two questions; most people need one or two. Every question below is about money you will have later: in retirement, for health care, for your kids, for the things you give to. Nearly every one has a deadline of December 31; the few that run to April 15 say so. Each answer is short on purpose and ends with the article in this edition that explains the whole thing, with the numbers.
Your paycheckThree questions for anyone with a W-2.3 questions
Will your 401(k) or 403(b) be full by your last paycheck of the year?
The 2026 limit is $24,500, plus $8,000 if you are 50 or older ($11,250 at ages 60 through 63). Every dollar comes off this year's taxable income. Contributions come out of pay, so the only way to catch up is to raise the percentage on the paychecks you have left; call HR this week, not in December. And if your employer matches, make sure you are at least getting all of the match: some plans match per paycheck, so hitting the limit in October and stopping can forfeit the match for November and December.
Who: anyone with a workplace plan who isn't at the limit. Deadline: your final 2026 paycheck.
Did anything change your income this year that your withholding doesn't know about?
A raise, a bonus, a second job, a spouse who started or stopped working, a side business, a big year in the brokerage account. The W-4 you filled out years ago is still running. One extra amount on line 4(c) of a new W-4 for the last few paychecks heads off an April bill and the underpayment penalty, because the IRS treats withholding as paid evenly through the year no matter when it came out.
Who: anyone whose income changed in 2026. Deadline: before your final paycheck.
The W-4 and your withholding → · Estimated payments and the safe harbor →
Is there money in your flexible spending account you haven't used?
Health FSAs are use-it-or-lose-it, with a small carryover or a short grace period depending on your plan. Check the balance in November. Glasses, dental work, prescriptions and most over-the-counter medicines all count.
Who: anyone with an FSA balance. Deadline: December 31, or your plan's grace date.
Your future health careThe HSA is the best account in the tax code, and most people underuse it.2 questions
If you have a high-deductible health plan, is your Health Savings Account full?
For 2026 that is $4,400 for self-only coverage and $8,750 for a family, plus $1,000 if you are 55 or older. The money goes in before tax, grows untaxed, and comes out untaxed for medical costs at any age, with no deadline to spend it. You can still contribute for 2026 until April 15, 2027, but a payroll contribution before December 31 also skips Social Security and Medicare tax.
Who: anyone on a high-deductible plan. Deadline: December 31 through payroll; April 15 for a direct deposit.
Is a large medical or dental bill coming? Could it land in the same year as your other big medical costs?
Medical costs are deductible only above 7.5% of income, and only if you itemize. If you are facing a large elective bill, scheduling it in the same year as other big medical costs, or in a year when you already itemize, is the difference between a deduction and nothing.
Who: anyone with a major medical expense coming. Deadline: December 31.
Your future retirementThe accounts you fund outside of work, and the ones you have to start emptying.4 questions
Have you funded an IRA, traditional or Roth, for 2026?
$7,500 for 2026, plus $1,100 if you are 50 or older. You have until April 15 to make the deposit, but deciding now, while you can still see the whole year, is the point. Traditional or Roth depends on your bracket this year against your bracket later. If your income is too high for a Roth, the backdoor route (a non-deductible traditional contribution, then a conversion) works cleanly only if you have no other pre-tax IRA money; otherwise the arithmetic needs a look first.
Who: anyone with earned income. Deadline: April 15, 2027; the backdoor conversion step should land in 2026.
Is this a low-income year for you? Would a Roth conversion make sense?
A year between jobs, the first years of retirement before Social Security and required distributions begin, a year with a big loss. Moving money from a traditional IRA to a Roth in a year when you are in a low bracket means paying the tax now at a low rate instead of later at a higher one. The amount should be chosen to fill a bracket, not blow through it; the conversion cannot be undone, and it raises the income Medicare looks at two years later.
Who: retirees in their 60s, anyone with a low-income year. Deadline: December 31.
If you are 73 or older, have you taken your required minimum distribution?
The penalty for missing it is 25% of the shortfall. If you have several IRAs, the total can come from any one of them, but it has to be out by December 31. Inherited IRAs have their own schedule. If you are 70½ or older and you give to charity, read the giving question below before you take it.
Who: 73 and older, and anyone with an inherited IRA. Deadline: December 31.
Did you start Social Security, retire, or start drawing from retirement accounts this year?
The first year of retirement is the year people are most surprised in April. Social Security can be taxable, pensions and IRA withdrawals often have too little withheld, and the Medicare premium you pay two years from now is set by this year's income. For 2025 through 2028 there is also an extra $6,000 deduction at 65 and older that phases out with income, so a withdrawal that could be taken in either year is worth placing deliberately.
Who: anyone in the first years of retirement. Deadline: December 31 for anything you control the timing of.
How Social Security is taxed → · The Medicare cliff → · The senior deduction →
Your investmentsFor money outside of retirement accounts.2 questions
Did you sell something at a big gain this year? Is anything sitting at a loss?
Losses you take before December 31 offset gains you already took, and up to $3,000 of ordinary income after that; what's left carries forward. The reverse is also true: if you already have losses, or your income is low enough to sit in the 0% capital gains bracket, this may be the year to take a gain you have been putting off. The trade has to settle in 2026, and buying the same thing back within 30 days undoes the loss.
Who: anyone with a taxable brokerage account. Deadline: December 31, settled.
Capital gains, including the home sale → · Tax planning for investors →
Are you about to buy a mutual fund in a taxable account in December?
Many funds pay out their capital gains in mid-December. Buy the day before, and you get a tax bill for gains you never enjoyed. Check the distribution date first, or wait until after it.
Who: anyone adding to a taxable account this month. Deadline: the fund's record date.
Your givingThe rules for charitable giving changed for 2026. Timing matters more than it used to.3 questions
Do you give regularly but take the standard deduction?
Starting with 2026, you can deduct a modest amount of cash gifts even without itemizing. Beyond that, giving two years' worth in one year, so that you itemize in that year and take the standard deduction the next, often beats giving the same amount evenly. A donor-advised fund makes this painless: you deduct now and send the money to your charities over time. For itemizers, 2026 also brings a floor: the first 0.5% of income in gifts no longer counts.
Who: anyone who gives and doesn't itemize, or barely does. Deadline: December 31; a card charge or a mailed check dated in 2026 counts.
The new deduction for non-itemizers → · Charitable giving in 2026 →
Are you 70½ or older with an IRA?
A qualified charitable distribution, money sent straight from your IRA to the charity, is never counted in your income, satisfies your required distribution, and keeps your income low for Social Security taxation, Medicare premiums and the senior deduction. For a retiree who gives anyway, it almost always beats writing a check. Allow the custodian two weeks.
Who: 70½ and older with an IRA. Deadline: December 31, out of the IRA.
Do you own a stock that has gone up a lot?
Give the shares, not the cash. You deduct the full value, and nobody ever pays the tax on the gain. Most charities and every donor-advised fund can take them; start the transfer early in December, because it takes longer than a check.
Who: anyone who gives and holds appreciated stock. Deadline: December 31, with the transfer complete.
Your life this yearThe return follows the life. Tell your preparer about the life.4 questions
Did you sell a house?
Most people owe nothing on the sale of a home they lived in, up to $250,000 of gain, $500,000 for a couple. If the gain is bigger than that, or it was a rental or a second home, there is real planning to do, and some of it has to happen before the year ends.
Who: anyone who sold property in 2026. Deadline: December 31 for anything that offsets the gain.
Did you get married, divorced, or widowed?
Your filing status for all of 2026 is decided by your status on December 31. A wedding in December changes the whole year. A divorce that could close in December or January is a conversation, not just a date. A widow or widower keeps the joint rates this year and, with a dependent child, for two more; without one, the single rates arrive next year on the same income.
Who: anyone whose marital status changed or is about to. Deadline: December 31.
Did you have or adopt a child? Did a child start college?
New dependents, the child tax credit, dependent care and the education credits all reward knowing the rules in advance. Paying a spring tuition bill in December, for instance, can move an education credit into this year; a 529 contribution before December 31 may also earn a state deduction.
Who: parents of children of any age in school. Deadline: December 31.
The child tax credit → · The education credits → · Dependent care →
Did you inherit anything, receive a large gift, or move to another state?
Each of these changes something. Inherited IRAs have their own withdrawal clock. Gifts over $19,000 to one person in 2026 mean a gift tax return for the giver, not a tax. A move changes which state gets your income and when, and the day you count as the move matters.
Who: heirs, givers and movers. Deadline: varies; ask before December 31.
Inherited property and the step-up → · Gift and estate taxes →
If you own a businessThe questions that can't wait until the return is being prepared.4 questions
Do you know roughly what your profit will be this year?
Everything else depends on this. If you don't know within a reasonable range, that is the first conversation, and it decides whether to pull expenses into December or push December's invoices into January. Deferring income only helps if next year's bracket is the same or lower.
Who: every owner on the cash method. Deadline: December 31.
Tax planning for the self-employed → · The 20% QBI deduction →
Have you set up a retirement plan for the business?
A solo 401(k) for a one-person business must exist on paper by December 31 to take the full employee deferral for 2026, even if the money goes in later. A SEP can be opened and funded as late as the filing deadline, extensions included; it is the escape hatch for an owner who reads this in March, but it holds less.
Who: owners with profit and no plan. Deadline: December 31 for the solo 401(k).
Do you need equipment or a vehicle in the next few months anyway?
Buying it and putting it to use before December 31 moves the deduction into this year; 100% bonus depreciation is back for good, and Section 179 covers up to $2,560,000 for 2026. Ordered and sitting on a truck doesn't count. Buying something you don't need for the deduction is never a good trade, and a good preparer will tell you so.
Who: owners with a purchase already planned. Deadline: in service by December 31.
If you are an S corporation: is your salary reasonable, and is the fourth estimate right?
Too low a salary against distributions is the most common thing the IRS looks at on an S corporation return, and it is far easier to fix in the last payroll of the year than in an audit. Then compare the year's actual profit with the estimates you've paid; the January 15 payment is the last chance to reach the safe harbor and avoid a penalty that is interest paid for nothing.
Who: S corporation owner-employees. Deadline: the last 2026 payroll; January 15, 2027 for the estimate.
Let’s get together before the year ends
If one of these questions is yours, you probably already know what to do. If two or more are, or you read one and thought “I’m not sure,” that is what a year-end planning session is for: a short meeting, before the year closes, and the only part of the tax year where the outcome is still up to you. The practice named below holds the seat for this edition and does this kind of planning for a living: sizing a Roth conversion to your bracket, fixing the withholding for the last paychecks, timing a gift, a sale or a retirement withdrawal so it lands in the right year, and seeing how the state return changes the answer. Call them and ask for a year-end planning session, or send your question from the box at the foot of this page.
Written by Charles Trautman, EA, editor · Need to Know Tax, Lone Tree, Colorado
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