Year-end tax planning 2026 matters more than usual because 2026 is the first year several One Big Beautiful Bill Act rules take full effect, including a new charitable deduction for non-itemizers, a 0.5% floor on itemized charitable gifts, and higher retirement contribution limits. Most moves must be completed by December 31, 2026. Below are the strategies worth reviewing now, with the 2026 numbers from the IRS 2026 inflation adjustments and the IRS retirement plan limits.
Year-End Tax Planning 2026 Deadlines
| Action | Deadline |
|---|---|
| 401(k), 403(b) and 457(b) deferrals | December 31, 2026 (through payroll) |
| Required minimum distributions | December 31, 2026 (April 1, 2027 for a first RMD) |
| Qualified charitable distributions | December 31, 2026 |
| Charitable gifts, tax-loss harvesting, Roth conversions | December 31, 2026 |
| Annual exclusion gifts ($19,000 per recipient) | December 31, 2026 |
| Equipment placed in service for Section 179 or bonus depreciation | December 31, 2026 |
| IRA and HSA contributions for 2026 | April 15, 2027 |
| Fourth-quarter 2026 estimated tax payment | January 15, 2027 |
1. Max Out Retirement Contributions
- 401(k), 403(b), governmental 457(b): $24,500, plus $8,000 if 50 or older, or $11,250 instead if you are 60 to 63.
- Roth catch-up rule: If your 2025 wages from your employer were over $150,000, catch-up contributions in 2026 must be Roth.
- IRA: $7,500, plus $1,100 if 50 or older. You have until April 15, 2027.
Check your year-to-date deferrals now; there may only be a few paychecks left to increase them. See 401(k) contribution limits for 2026.
2. Rethink Charitable Giving for the New 2026 Rules
- Non-itemizers can deduct up to $1,000 ($2,000 for joint filers) of cash gifts to qualifying public charities, starting in 2026. Gifts to donor-advised funds do not count.
- Itemizers can only deduct charitable gifts above 0.5% of AGI, and taxpayers in the 37% bracket get a benefit capped at 35%.
- Bunching: If you itemize only some years, consider grouping two years of gifts into one year.
- Qualified charitable distributions: If you are 70½ or older, you can give up to $111,000 directly from an IRA in 2026, excluded from income and counting toward your RMD.
Read more about the 2026 universal charity deduction and qualified charitable distributions.
3. Claim the New OBBBA Deductions
The IRS fact sheet on the new deductions explains four breaks available for 2025 through 2028, whether or not you itemize:
- Tips: Up to $25,000 of qualified tips, phasing out above $150,000 of modified AGI ($300,000 joint).
- Overtime: Up to $12,500 ($25,000 joint) of the premium portion of FLSA-required overtime pay, with the same phase-out.
- Seniors: Up to $6,000 per person 65 or older, phasing out above $75,000 ($150,000 joint).
- Car loan interest: Up to $10,000 on a loan for a new, U.S.-assembled personal vehicle, phasing out above $100,000 ($200,000 joint).
Married couples must file jointly to claim the tips, overtime and senior deductions. Make sure your pay stubs or W-2 show qualified tips and overtime, and keep your loan statement and vehicle VIN.
4. Manage Your Income Around Phase-Outs
A key part of year-end tax planning 2026 is managing modified AGI, because several breaks phase out as it rises. Pre-tax retirement contributions, HSA contributions and timing of bonuses, IRA withdrawals or Roth conversions can keep you below a threshold. The SALT cap is $40,400 for 2026 but shrinks above $505,000 of modified AGI. See the SALT deduction for 2026.
5. Harvest Investment Losses
Selling investments at a loss can offset gains, plus up to $3,000 of ordinary income, with the rest carried forward. Avoid buying the same or a substantially identical investment within 30 days before or after the sale, or the wash sale rule disallows the loss. If your taxable income is low, you may instead realize gains at 0%, which applies up to $49,450 of taxable income for single filers and $98,900 for joint filers in 2026. See how tax-loss harvesting works.
6. Consider a Roth Conversion
Converting part of a traditional IRA to a Roth IRA adds taxable income now in exchange for tax-free withdrawals later. Low-income years, such as early retirement before Social Security and RMDs begin, are often the best time. Watch the effect on the senior deduction, Medicare premium surcharges (based on income two years earlier) and the taxation of Social Security benefits.
7. Business Owners: Buy, Place in Service, Document
- Section 179 allows up to $2,560,000 of expensing for 2026, and 100% bonus depreciation is available for qualifying property acquired after January 19, 2025. Equipment must be placed in service by December 31. See 2026 Section 179 rules.
- QBI deduction: Check whether income is near the $201,750 (single) or $403,500 (joint) threshold. See the QBI deduction for 2026.
- 1099 changes: For payments made in 2026, Forms 1099-NEC and 1099-MISC are generally required at $2,000 rather than $600.
- S corporation owners: Review reasonable compensation before the final payroll of the year.
8. Required Minimum Distributions
If you are 73 or older, take your 2026 RMD by December 31. Missing it can trigger a 25% excise tax, reduced to 10% if corrected promptly. A QCD can satisfy all or part of the RMD while keeping it out of AGI. See required minimum distribution rules for 2026.
9. Make Annual Exclusion Gifts
You can give up to $19,000 per person in 2026 ($38,000 for a married couple) without using your lifetime exemption, which is $15,000,000 per person. Paying tuition or medical bills directly to the provider does not count against the annual exclusion. See our 2026 gift tax guide.
10. Check Withholding and Estimated Taxes
Year-end tax planning 2026 should end with a withholding check. To avoid an underpayment penalty, pay at least 90% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 AGI was over $150,000) through withholding and estimates. Withholding is treated as paid evenly through the year, so increasing it in December can cover a shortfall from earlier quarters.
Frequently Asked Questions
What is the deadline for year-end tax moves in 2026?
Most must be completed by December 31, 2026. IRA and HSA contributions for 2026 can be made until April 15, 2027.
Should I donate to charity before the end of 2026?
If you itemize, the new 0.5% AGI floor applies to 2026 gifts. If you do not itemize, cash gifts of up to $1,000 ($2,000 joint) to public charities are now deductible.
Can I still deduct tips and overtime in 2026?
Yes. The deductions apply for 2025 through 2028, within the dollar limits and income phase-outs.
When is the last 2026 estimated tax payment due?
January 15, 2027. See our post on 2026 quarterly tax payments.
Final Thoughts
Year-end tax planning 2026 is about using new rules on purpose: the non-itemizer charitable deduction, the tips, overtime and senior deductions, and higher retirement limits. Pick the two or three moves that fit your situation and complete them before December 31.
Have questions about how this applies to your situation? Book a free consultation with Aric and get answers from a CPA.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
