Year-End Tax Moves to Make Before December 31

Why the next few weeks matter

Most tax-saving moves have a hard deadline: December 31. Once the calendar flips, your 2026 tax bill is largely locked in.

This year also brings new rules. The tax law passed in July 2025 (often called the One Big Beautiful Bill Act) changed how charitable gifts are deducted starting in 2026, raised the state and local tax (SALT) deduction cap, and made several business write-offs permanent. Some strategies that worked last year now work differently.

Here are seven moves worth reviewing with your tax advisor before year-end — four for individuals and families, three for business owners.

Moves for individuals and families

1. Max out your retirement and health savings accounts

Contribution limits went up for 2026, so even if you maxed out last year, you may have more room.

401(k) deferrals must come out of a paycheck by December 31, so talk to payroll now. IRA and HSA contributions for 2026 can generally be made until the April 2027 filing deadline.

New for 2026: if you earned more than $150,000 in FICA wages in 2025, your 401(k) catch-up contributions must now go in as Roth (after-tax) dollars. Check that your plan is set up for this.

2. Rethink how and when you give to charity

Charitable giving rules changed this year, and the changes cut both ways.

• If you itemize: only the portion of your giving above 0.5% of your adjusted gross income (AGI) is deductible. With a $200,000 AGI, the first $1,000 you give doesn't count.
• If you're in the top 37% bracket: the tax value of itemized deductions is capped at 35 cents per dollar.
• If you take the standard deduction: good news — you can now deduct up to $1,000 ($2,000 for married couples) of cash gifts made directly to qualifying charities, without itemizing.

The move: consider "bunching" two or more years of gifts into one year, often through a donor-advised fund, so you clear the floor and itemize that year. Take the standard deduction in the off years.

3. Decide whether to itemize — the higher SALT cap may change the answer

The cap on deducting state and local taxes rose to $40,400 for 2026 (it was $10,000 before 2025). It shrinks for incomes above roughly $505,000. The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.

In a high-tax state, property tax plus state income tax can now push many homeowners past the standard deduction for the first time. If you'll itemize, paying deductible state and local taxes before December 31 can pull the deduction into 2026.

4. Harvest investment losses and use your gift exclusion

• Tax-loss harvesting: selling investments that are down can offset gains you've already realized this year, plus up to $3,000 of ordinary income. Watch the wash-sale rule if you buy back the same investment within 30 days.
• Annual gifts: you can give up to $19,000 per person ($38,000 for married couples) in 2026 without filing a gift tax return. The exclusion resets January 1, so unused 2026 room disappears.

Moves for business owners

5. Buy and place equipment in service before December 31

100% bonus depreciation is now permanent, and the Section 179 expensing limit is $2.56 million for 2026. Together, they let most small businesses deduct the full cost of qualifying equipment, computers, furniture and some vehicles in the year they're bought.

The catch: the asset must be placed in service — delivered and ready to use — by December 31. Something ordered in December but delivered in January counts for 2027.

6. Time your income and expenses, and fund an owner retirement plan

• Cash-basis businesses: sending some invoices in late December rather than mid-month, or paying January bills early, can shift taxable income between years. This works best when you expect to be in a similar or lower bracket next year.
• The 20% qualified business income (QBI) deduction for pass-through owners is now permanent. Your salary, wages paid and income level all affect how much you get, so it's worth modeling before year-end.
• Owner retirement plans: a solo 401(k) or SEP IRA can shelter up to $72,000 in 2026. A solo 401(k) generally must be opened by December 31 to accept 2026 employee deferrals.

7. Get ready for 1099s and your final estimated payment

Starting with payments made in 2026, you only need to issue a Form 1099-NEC or 1099-MISC to a contractor you paid $2,000 or more, up from $600. Collect W-9s from contractors now so January filing goes smoothly.

Your fourth-quarter estimated tax payment for 2026 is due January 15, 2027. A strong year may mean that payment needs to be larger to avoid an underpayment penalty.

Your year-end checklist

• Raise 401(k) contributions through payroll before the last 2026 paycheck
• Confirm your plan handles Roth catch-ups if you earned over $150,000 in 2025
• Plan IRA and HSA contributions (deadline: April 2027)
• Decide whether to bunch charitable gifts this year or next
• Compare itemizing against the standard deduction with the new SALT cap
• Review your portfolio for tax-loss harvesting opportunities
• Make annual gifts of up to $19,000 per person
• Get equipment purchases delivered and in use by December 31
• Open a solo 401(k) by December 31 if you're self-employed
• Collect W-9s from contractors you paid $2,000 or more
• Size your January 15, 2027 estimated tax payment

Let's make a plan before December 31

Every move above depends on your income, your business and your goals — and several only work if they're done before the year ends. A short year-end planning meeting is usually enough to find the two or three that matter most for you.

Schedule your year-end review with Find A Good Accountant: call 760-423-6226 or book online.