Tax season may be months away, but some of the decisions that affect your 2026 tax bill need to happen before the calendar flips. A quick financial review now could uncover valuable opportunities to save and help you stay ahead of important deadlines. 

Fortunately, year-end tax planning doesn’t have to be a major headache. Here are five practical steps to help you focus on what matters most before 2027.

Step #1) Get a Clear Picture of Your 2026 Tax Situation

Before making any changes, start with a rough estimate of your total income and taxes for 2026. The goal isn’t a perfect calculation, but a clearer understanding of where you stand and which tax planning opportunities might make sense before the year closes.

To get a better picture of your 2026 tax situation, focus on these four things:

1. Estimate your total income: Include your regular paycheck, bonuses, stock compensation, investment gains, business income, and retirement withdrawals.

2. Review potential deductions and credits: Look at retirement contributions, charitable donations, deductible expenses, and tax credits you may qualify for.

3. Check what you’ve already paid: Compare your estimated tax liability with your payroll withholding and quarterly estimated payments.

4. Consider what might change in 2027: A major income increase, retirement, or another financial transition could influence whether certain tax moves make more sense now or next year.

Step #2) Prioritize Tax Moves That Need to Happen Before December 31st

Some tax planning opportunities disappear when the year ends, making these the decisions worth addressing first. A little planning now can help you take advantage of available opportunities rather than discovering them after the deadline has passed.

Here’s a quick rundown of the tax moves to review before 2027:

Retirement Account Moves

Investments, Giving, and Other Year-End Tax Moves

Step #3) Take Advantage of Tax Moves With Later Contribution Deadlines

Not every tax-advantaged contribution needs to be completed before December 31st. Some contributions can still count toward 2026 if you make them before the 2027 tax-filing deadline, while certain business retirement plans allow additional time.

Here are the main opportunities and contribution limits to keep in mind:

Step #4) Revisit Additional Tax Deductions That May Matter for 2026

Several tax law changes could affect the deductions available on your 2026 return. Before deciding whether to make additional deductible expenses or charitable contributions, take another look at what you may qualify for.

Here are three areas worth reviewing:

• Charitable giving: Starting in 2026, qualifying taxpayers who don’t itemize can deduct up to $1,000 in eligible cash donations, or $2,000 if married filing jointly. Those who itemize generally can deduct charitable contributions only to the extent they exceed 0.5% of adjusted gross income, subject to other applicable limits.⁶

• State and local taxes (SALT): The 2026 deduction cap is $44,400 for most taxpayers who itemize ($20,200 if married filing separately). Once modified adjusted gross income surpasses $505,000 ($252,500 if married filing separately), the deduction cap gradually decreases, subject to a $10,000 minimum ($5,000 for separate filers). Review your itemized deductions against the standard deduction when planning eligible expenses.¹⁵

• Additional deductions: Eligible adults age 65+ may qualify for an additional $6,000 deduction per person, or $12,000 for qualifying married couples, with income phaseouts beginning above $75,000 or $150,000 for joint filers. Other deductions may also apply to qualifying tips (up to $25,000), overtime compensation (up to $12,500, or $25,000 for joint filers), and eligible vehicle loan interest (up to $10,000). Each has specific eligibility requirements and income limitations.¹⁶

Step #5) Double-Check Your Tax Payments Before 2027

Even after taking advantage of available deductions, you could face an unexpected tax bill if you haven’t paid enough throughout the year. Review your projected tax liability against your withholding and estimated payments, particularly if your income changed significantly.

You can generally avoid federal estimated tax penalties by paying the lesser of 90% of your current-year tax liability or 100% of the previous year’s tax. The prior-year threshold increases to 110% if your 2025 adjusted gross income exceeded $150,000 ($75,000 if married filing separately), with certain exceptions.¹⁷

If you’re still receiving paychecks, you may have time to adjust your withholding. For taxpayers making quarterly estimated payments, the final federal installment for 2026 is generally due January 15th, 2027. Keep in mind that making a late payment doesn’t necessarily eliminate penalties from earlier underpayments.¹⁷

2026 Year-End Tax Planning FAQs

1. Can I still lower my 2026 taxes after December 31st?

Potentially. Certain contributions, including eligible traditional IRA and HSA contributions, can still be made before the tax-filing deadline and may reduce your 2026 tax bill. However, transactions such as Roth conversions and investment sales generally cannot be backdated after the year ends.

2. Does a Roth conversion lower my taxes for 2026?

Usually not. Converting traditional retirement savings to a Roth account generally creates an immediate tax liability. The trade-off is the potential for qualified tax-free withdrawals later, which can be especially valuable if you anticipate higher taxes in retirement. 

3. Can I deduct an investment loss without selling the investment?

No. A decline in an investment’s market value doesn’t create a deductible capital loss by itself. You generally need to sell the investment in a taxable account to realize the loss. Under wash-sale rules, purchasing substantially identical securities within 30 days before or after a sale can delay your ability to deduct the loss.

4. How do the 2026 Roth catch-up contribution rules affect higher earners?

Starting in 2026, employees who earned more than $150,000 in 2025 wages from their retirement plan sponsor generally must make catch-up contributions as Roth contributions. These contributions won’t reduce current taxable income, but qualified withdrawals can be tax-free. Check with your plan administrator if you’re eligible to make catch-up contributions.

5. Are gifts to family members tax-deductible?

No. Giving money or property to family members generally doesn’t create a federal income tax deduction. However, the 2026 federal gift-tax exclusion allows individuals to give $19,000 per recipient annually, potentially doubling to $38,000 for married couples. Exceeding these limits may require filing a gift tax return, though taxes aren’t automatically due. 

Get Help With Your 2026 Year-End Tax Planning

A little planning before December 31st can make a meaningful difference when tax season arrives. The goal isn’t to pursue every possible tax deduction, but to make thoughtful decisions while you still have time to act.

Your taxes are also just one part of your financial picture. Retirement savings, investments, charitable giving, and upcoming financial needs should all play a role in determining which year-end moves make sense.

At Crafted Finance, we help clients look at these decisions alongside their broader financial plans and coordinate with their tax professionals. If you’d like a second set of eyes on your 2026 year-end tax planning, schedule a complimentary call with our team using the button below.