Year-End Tax Planning 2026: What Must Happen by Dec 31

Almost every year-end tax planning move you want counted for 2026 shares one deadline: December 31. Workplace retirement contributions, required minimum distributions, Roth conversions, tax-loss harvesting sales, and charitable gifts all close that night. Miss it and the window shuts with no extension and no do-over. Two kinds of accounts are the exceptions. IRA and HSA contributions stay open until the April 2027 filing deadline. A SEP IRA for the self-employed can stay open until October 2027.

The April deadline gets all the attention. December 31 does more quiet damage.

October feels early. It is not. The calendar looks wide open every fall, and then around Thanksgiving it collapses into two weeks of closed offices and half-answered emails. Every move tied to the calendar year gets squeezed into that same shrinking window. That is why I start year-end planning in October.

We mean to get to it. We get busy. We find out from the January statement.

Send this to the friend who misses the 401(k) limit by a few hundred dollars every single year.

Keep these dates in one place:

A 401(k), 403(b), or 457 plan runs on the calendar year, not the filing deadline. For 2026, the employee contribution limit is $24,500. If you are 50 or older, you can add an $8,000 catch-up contribution. If you turn 60, 61, 62, or 63 this year, the catch-up rises to $11,250. Only money withheld from a 2026 paycheck counts toward the 2026 limit.

The limit works like vacation days that do not roll over. Room you leave unused on December 31 is gone. The analogy breaks in one place: no manager reminds you to use it.

Higher earners face a new rule this year. If your 2025 wages from your employer topped $150,000, your 2026 catch-up contributions must go in as Roth (after tax) instead of pre-tax. The rule comes from SECURE 2.0. The switch surprises many long-time savers the first time payroll applies it. If the rule applies to you, confirm your setup with HR now, not in January.

If you are 73 or older, you owe a required minimum distribution (RMD) each year. An RMD is the amount the IRS makes you withdraw from traditional IRAs and most workplace plans. Your first RMD can wait until April 1 of the next year. Every RMD after that is due by December 31. If you still work for the employer that sponsors your 401(k), that plan's RMDs can usually wait until you retire.

If you miss an RMD, the IRS charges a 25% excise tax on the shortfall. A quick correction cuts that to 10%.

You can total your IRA RMDs and take the full amount from one IRA. Each 401(k) needs its own withdrawal.

If you are 70½ or older, a qualified charitable distribution (QCD) sends up to $111,000 from your IRA straight to a charity in 2026. A QCD counts toward your RMD and stays out of your taxable income. The money must move directly from your IRA custodian to the charity. A donor-advised fund cannot receive a QCD.

Plan the RMD, any QCD, and any Roth conversion as one decision. All three change your 2026 income. If you will be on Medicare in 2028, that income sets your 2028 premiums.

Regular charitable gifts follow the same December 31 clock. That includes money you put into a donor-advised fund. The gift must be complete by December 31 to count on your 2026 return.

Family gifts reset too. The annual gift tax exclusion lets you give each person up to $19,000 in 2026 without filing a gift tax return. The exclusion resets on January 1, used or not.

Tax-loss harvesting means selling an investment at a loss to offset gains elsewhere. The loss counts for 2026 only if you sell by December 31. For most stock and fund sales, the trade date sets the tax year. Settlement can land in January. Finish the sales by mid-December anyway. That leaves time to catch and fix a mistake.

If you buy a substantially identical investment within 30 days before or after the sale, the wash sale rule blocks the 2026 loss.

Most flexible spending accounts (FSAs) still run on use-it-or-lose-it. Some employers give you a grace period into mid-March. Others let you carry up to $680 into 2027. A plan can offer one or the other, never both. Read your own plan documents before you count on either. A wrong guess forfeits real money.

Most of this list locks on December 31. Handle those moves first, while offices are open and emails get answered. IRA and HSA contributions for 2026 can wait until the April 2027 filing deadline without a penalty.

If you work for yourself, one more account stays open even longer. You can open and fund a SEP IRA (Simplified Employee Pension, a retirement account the business funds) until your business's tax filing deadline, including extensions. For a sole proprietor or single-member LLC that files an extension, that date is October 15, 2027. Partnerships and S corporations get September 15, 2027. For 2026, the business can put in up to 25% of pay, capped at $72,000. For a self-employed owner, the math works out to roughly 20% of net self-employment earnings.

If you have eligible employees, a SEP requires you to contribute the same percentage of pay for them as for yourself. The employer side of a solo 401(k) or SIMPLE IRA also runs to the extended deadline. If you already have a solo 401(k), make the employee deferral election by December 31.

I work with small business owners, and one moment repeats every year. Before April 15, a sole proprietor asks me to get the tax bill as low as the rules allow. I calculate the SEP contribution, and the April tax payment assumes that money will go in. The extension buys six months to fund it. Then the six months pass, and the contribution never makes it into the cash budget.

By October, I am the one explaining the math. The April payment already counted on the SEP deduction. If the money does not go in, the deduction for that year is gone, and the extra tax arrives with interest back to April. The money usually exists, in a savings or brokerage account. Moving it into the SEP keeps the deduction, and the math works.

If you are a sole proprietor who extended your 2025 return and planned a 2025 SEP contribution, your deadline is Thursday, October 15, 2026. Move the money before then.

Knowing which accounts follow the calendar and which follow the tax return is most of the work. Take this list to your CPA or tax preparer before December, while these moves can still change your return. The calendar does not care that you were busy. Pick one item from this list this week, and December becomes a month for family instead of paperwork.