Smart Moves to Make Before Year-End: Your 2026 Tax Planning Guide

No one likes a surprise balance due when they file. The good news is that the weeks before December 31 are when you still have real control over your 2026 tax bill. Below are the planning opportunities worth a look this year — several of them brand new. If any of these apply to you, let’s talk before year-end so we can act while there’s still time.

A bit of reassurance up front: the lower tax brackets and rates that took effect in 2017 are now permanent, thanks to the 2025 law commonly called the One Big Beautiful Bill Act (OBBBA, enacted as H.R. 1). There is no looming rate increase to plan around. The goal this year is simply to keep your taxable income as low as the rules allow.

For Individuals and Families

Make sure your payments cover the “safe harbor”

To avoid an underpayment penalty for 2026, you generally need to have paid — through withholding and timely estimated payments — the smaller of 90% of your 2026 tax or 100% of your 2025 tax. If your 2025 adjusted gross income (AGI) was over $150,000 ($75,000 if married filing separately), that second figure rises to 110% of your 2025 tax. The final quarterly estimated payment for 2026 is due January 15, 2027. This is a good time to check whether you’re on track.

Fund your retirement and health accounts

You have until the April 15, 2027, filing deadline to make 2026 contributions to a traditional or Roth IRA and to a health savings account (HSA):

• IRAs — the combined limit for 2026 is $7,500, plus a $1,100 catch-up if you’re 50 or older.
• HSAs — $4,400 for self-only high-deductible coverage and $8,750 for family coverage, plus an extra $1,000 if you’re 55 or older. An HSA is one of the few accounts that is tax-advantaged three ways over: your contribution is deductible, the money grows tax free, and withdrawals for qualified medical costs come out tax free.

If you participate in a workplace plan — a 401(k), 403(b), governmental 457, or the Thrift Savings Plan — you can defer up to $24,500 for 2026 (or 100% of your pay, if less). The catch-up is $8,000 if you’re 50 or older, and a larger $11,250 catch-up applies if you turn 60, 61, 62, or 63 during the year. One new wrinkle: starting in 2026, if your prior-year wages with that employer topped $150,000, any catch-up contributions to a plan with a Roth feature must be made on a Roth (after-tax) basis.

New deductions for tips and overtime

For the second year, workers who earn qualified tips or qualified overtime may be able to deduct them. Your 2026 Form W-2 will help you claim these: a new Box 14b shows the Treasury tipped-occupation code if you receive cash tips, while Box 12 reports your total cash tips (code TP) and qualified overtime (code TT). Hold on to that W-2 — those figures feed directly into the deduction.

Harvesting gains and losses

If your taxable income lands below the 0% long-term capital gains threshold — $49,450 for single filers, $98,900 for joint filers — you may be able to sell appreciated investments without owing federal capital gains tax on the portion that falls inside the 0% bracket.

On the flip side, if you hold investments in a taxable account that are worth less than you paid, selling them can offset gains you’ve realized elsewhere. Losses first offset gains of the same type (long-term against long-term, short-term against short-term). Just mind the wash-sale rule: if you want the loss to count this year, don’t buy substantially identical securities within 30 days before or after the sale.

Charitable giving — new rules worth knowing

There are three changes this year that affect how you give:

A deduction even if you don’t itemize. New for 2026, you can deduct up to $1,000 ($2,000 if married filing jointly) in cash gifts to qualifying charities even if you take the standard deduction. The gift can’t go to a donor-advised fund or a certain type of supporting organization. If you’d normally skip tracking small donations, start keeping receipts — they now matter.

A new floor if you do itemize. Starting in 2026, itemizers can only deduct charitable gifts above 0.5% of their AGI — similar in spirit to the floor that already applies to medical expenses. Because of this, timing matters more than ever. “Bunching” several years of giving into one year, or routing gifts through a donor-advised fund (you deduct in the year you fund it, then recommend grants over time), can help you clear the floor and preserve the deduction.

Giving straight from an IRA. If you’re 70½ or older, a qualified charitable distribution (QCD) lets you send up to $111,000 directly from your IRA to charity without counting it as income. If you’re subject to required minimum distributions, a QCD can satisfy some or all of your RMD — and because it isn’t an itemized deduction, it sidesteps both the 0.5% floor and the percentage limits entirely. QCDs must be completed by December 31.

High-income limits to watch

The suspension of miscellaneous itemized deductions is now permanent. On top of that, a new limit shaves the value of remaining itemized deductions for high earners: the deduction is reduced by 2/37 of the lesser of your total itemized deductions or the amount by which your income (plus those deductions) climbs past the start of the 37% bracket — $640,600 for single filers and $768,700 for joint filers in 2026. If you’re near that threshold and plan to itemize, there may be room to shift income or deductions to soften the hit.

The state and local tax (SALT) deduction cap rose to $40,400 for 2026 ($20,200 if married filing separately). But it phases down for higher earners — reduced by 30% of the amount your modified AGI exceeds $505,000 ($252,500 if married filing separately), though never below a floor of $10,000 ($5,000 MFS). If you’re affected, the pass-through entity tax (PTET) elections that many states offer remain a viable workaround, and OBBBA left them intact.

A bigger child and dependent care credit

If you pay for child or dependent care, the credit under the tax law grew for 2026: it now covers up to 50% of qualifying expenses, up from 35%. The rate steps down as income rises — dropping one point (but not below 35%) for each $2,000 your AGI exceeds $15,000, then stepping down again (but not below 20%) for each $2,000 ($4,000 for joint filers) over $75,000 ($150,000 joint).

Trump accounts — a new option for children

A new kind of IRA for children under 18, called a Trump account, launched July 4, 2026. Many eligible children can receive a one-time $1,000 contribution from the U.S. Treasury under a pilot program. To qualify for that pilot contribution, the child must be a U.S. citizen born after December 31, 2024, and before January 1, 2029, and have a Social Security number. You use Form 4547 to establish the account and make the election.

A few things to understand about how these accounts work:

• During the growth period, up to $5,000 a year can be contributed (indexed for inflation after 2027). Pilot, qualified general, and qualified rollover contributions don’t count against that annual limit.
• Contributions by family and friends are made with after-tax dollars, so those dollars come out tax free later — but the earnings are generally taxed on withdrawal. Employers, governments, and charities can also fund these accounts, and those contributions are generally taxed when withdrawn.
• Money can start coming out in the year the child turns 18.

Keep careful records of where every contribution comes from, and note that state tax treatment of these accounts can vary — worth checking for your state.

For Business Owners

The mileage rate changed mid-year

If you deduct business driving, note that the standard rate shifted partway through 2026. Through June 30, it was 72.5 cents per mile for business (20.5 cents for eligible medical and moving). From July 1 on, it’s 76 cents for business (23.5 cents for medical and moving). Keep your mileage logs split by date so each trip is valued at the right rate.

100% bonus depreciation is back — and permanent

OBBBA restored the first-year bonus depreciation deduction to 100% and made it permanent for qualified property acquired and placed in service after January 19, 2025. The key word is placed in service: to claim it on your 2026 return, the asset has to be up and running before year-end, not merely ordered or paid for. For buildings or larger recent purchases, a cost-segregation study can identify which components qualify for bonus depreciation or expensing.

Section 179 expensing is more generous

Direct expensing also got better. For qualified property placed in service in 2026, you can expense up to $2.56 million, phased down dollar-for-dollar once your qualifying purchases exceed $4.09 million.

The QBI deduction is now permanent

If you run a business as a sole proprietor, partnership, or S corporation, the qualified business income (QBI) deduction is now a permanent feature, and the phase-in ranges widened for 2026. For specified service businesses and the wage/investment limits, the phase-in range increased to $75,000, beginning at $201,750 of taxable income for most non-joint filers and $403,500 for joint filers. New this year: a minimum $400 deduction if you have at least $1,000 of QBI from active businesses in which you materially participate (both figures indexed for inflation starting in 2027).

A larger credit for employer-provided childcare

If your business helps employees with childcare, the credit for qualified childcare expenditures rose for 2026 to 40% (from 25%), or 50% for eligible small businesses, with the maximum credit climbing to $500,000 ($600,000 for eligible small businesses). The rules also now allow the credit for amounts paid under a contract with an intermediary that works with qualified childcare facilities.

Many of these moves — funding accounts, harvesting gains or losses, placing assets in service, completing a QCD — have to happen by December 31 to count for 2026. If any of them fit your situation, reach out and we’ll map out the specific steps and figures for you before the deadline.

This article is general information based on rules in effect for the 2026 tax year and isn’t individual tax advice. The right approach depends on your particular facts.