Year-End Tax Moves for 2026: 12 Things to Do Before December 31

Most tax-saving moves have a hard deadline: December 31. Once the year closes, your options for 2026 shrink to a few things like IRA and HSA contributions. With about seven weeks left in the year, here's what to check — including a few rules that are new for 2026.

1. Max out your 401(k)

Employee deferrals come out of your paycheck, so they have to happen by December 31. The 2026 limits:

• $24,500 employee deferral
• $32,500 if you're 50 or older ($24,500 + $8,000 catch-up)
• $35,750 if you turn 60 to 63 in 2026 and your plan allows the higher catch-up

Your employer's contributions count too: the overall 2026 limit for everything going into a 401(k) — your deferrals plus employer contributions — is $72,000.

Check your year-to-date contributions and bump your remaining paychecks if you have room. One new rule for 2026: if your 2025 wages from this employer topped $150,000, your catch-up contributions generally have to go in as Roth.

2. Do a Roth conversion — if the math works

A Roth conversion moves pre-tax IRA or 401(k) money into a Roth, where it grows tax-free. You pay tax on the converted amount now, so the best time is a year when your income — and your bracket — is lower than usual.

The deadline is December 31, 2026, and conversions can't be undone. Two things to watch: a conversion raises your MAGI, which can push you into a higher IRMAA tier for Medicare two years later, and it can push capital gains into a higher bracket. Run the numbers first.

3. Harvest investment losses

If you have losing positions in a taxable brokerage account, selling them before year-end lets you offset capital gains dollar for dollar. If your losses exceed your gains, up to $3,000 of the excess ($1,500 if married filing separately) can offset ordinary income, and the rest carries forward.

The deadline is the trade date, not the settlement date — place the order by December 31. And watch the wash sale rule: if you buy the same or a substantially identical security within 30 days before or after the sale, the loss is disallowed.

4. Harvest gains at 0%

The flip side: if your 2026 taxable income is at or below $49,450 single / $98,900 married filing jointly, your long-term capital gains are taxed at 0%. Selling appreciated holdings up to that room resets your cost basis higher at no federal tax cost.

Same deadline — trade by December 31.

5. Take your required minimum distribution

If you're 73 or older, you generally must take your RMD from traditional IRAs and workplace plans by December 31. Miss it and the penalty is steep — 25% of the amount you should have taken (10% if you correct it quickly).

Exception: your very first RMD can wait until April 1, 2027 — but then you'd take two RMDs in 2027, which could push you into a higher bracket.

6. Give to charity from your IRA (QCD)

If you're 70½ or older, a qualified charitable distribution lets you send money directly from your IRA to charity, up to the annual QCD limit. It counts toward your RMD, and the distribution isn't included in your income — which also helps with IRMAA, since it keeps your MAGI down.

The transfer must be completed by December 31, and it has to go directly to the charity, not through you.

7. Rethink charitable giving under the new rules

The One Big Beautiful Bill Act changed charitable deductions starting in tax year 2026:

• Non-itemizers get a deduction now. If you take the standard deduction, you can deduct up to $1,000 in cash gifts ($2,000 joint) to charity — new for 2026.
• Bunching still works for itemizers. If your itemized deductions are close to the standard deduction, bunching several years of giving into one year — often through a donor-advised fund — can push you over the line. Start stock transfers by mid-December so they settle in time.

8. Check your HSA and FSA

• HSA: The 2026 limit is $4,400 self-only / $8,750 family, plus $1,000 if you're 55 or older. Payroll contributions must run through payroll by December 31; direct contributions can be made until the April 2027 filing deadline, though without the payroll-tax savings.
• FSA: Health FSA money is generally use-it-or-lose-it after December 31, unless your plan offers a grace period or carryover (up to $660 for 2026). Check your balance and spend what's left on eligible expenses.

9. Make annual exclusion gifts

For 2026, you can give up to $19,000 to any one person without using any of your lifetime exemption or filing a gift tax return for that gift. A married couple can give $38,000 per recipient. It's a simple way to move money to family — and it resets every year, so unused room doesn't carry over.

10. Check your withholding and estimates

If you had a big income year — a bonus, a Roth conversion, capital gains — check that your withholding and estimated payments cover it. The fourth-quarter federal estimated payment for 2026 is due January 15, 2027. Underpaying can mean an underpayment penalty, but withholding counts as paid evenly through the year even if it comes out of a December paycheck.

11. What can wait until April 2027

Not everything is a December 31 deadline. These can be done by the April 2027 filing deadline:

• IRA contributions for 2026: $7,500 ($8,600 if you're 50+)
• HSA direct contributions for 2026 (though payroll contributions save more tax)
• SEP IRA contributions for 2026, if you're self-employed

Deciding now still helps with cash flow — but you don't have to fund them before the ball drops.

12. For business owners

A few year-end items if you run a business:

• Section 179 and bonus depreciation: For 2026, businesses can expense up to $2,560,000 of qualifying purchases, and 100% bonus depreciation is now permanent. Equipment must be placed in service by December 31 — ordered isn't enough.
• 1099 threshold doubled: Starting with payments made in 2026, the reporting threshold for 1099-NEC and 1099-MISC went from $600 to $2,000. Forms are due February 1, 2027.
• SALT cap is $40,400 for 2026, up from $10,000 — a big change for itemizers in high-tax states.
• New W-2 reporting: Employers must separately report qualified tips and overtime for 2026, under the new tax law.

The bottom line

December 31 is the real deadline for most of this — Roth conversions, RMDs, loss harvesting, 401(k) deferrals, and charitable gifts all have to be done by then. The IRA and HSA deadlines in April are the exception, not the rule.

Pick the three or four moves that fit your situation, do them before mid-December so nothing gets stuck in holiday processing, and head into 2027 with the year closed clean.

This post is for general information only and isn't tax advice. Talk to a tax professional about your specific situation.

Sources: IRS Notice 2025-67 and Rev. Proc. 2025-32 (2026 limits); IRS RMD FAQs; One Big Beautiful Bill Act provisions for tax year 2026.