End of year tax planning checklist: what to do before December 31

Year-end planning is mostly about dates. Some moves count only if they happen in the calendar year. Others count for the year until the April filing deadline. Mixing the two up is how clients miss a step they meant to take.

Sort each idea into one of the two columns first, for example a Roth conversion (this year) or an IRA deposit (until April). The table below covers the moves most clients ask about for 2026, with the record that proves each one.

Start with a projection built from last year’s return and this year’s pay stubs. The November question is whether the client already sits inside a safe harbor. Here a safe harbor is the payment level that keeps the underpayment penalty away even with a balance due in April. For 2026 that means withholding and estimates covering 90% of this year’s tax, or the full 2025 tax, stepped up to 110% when 2025 AGI topped $150,000 (IRS Publication 505). The self-employed checklist has the quarterly calendar.

Wages give you a late lever. Withholding from the last paychecks of the year counts toward the whole year, so a new Form W-4 in November can close a gap. The IRS Tax Withholding Estimator helps you check it (IRS Tax Withholding Estimator).

Estimated payers have one more date. The fourth payment for 2026 is due January 15, 2027 (IRS Publication 505). If you file and pay in full by January 31, 2027, you do not need to make that payment (IRS Publication 505).

For 2026, elective deferrals to a 401(k), 403(b) or 457 plan are capped at $24,500, with a catch-up of $8,000 from age 50 (IRS retirement plan limits (COLA)). Employees who turn 60 to 63 in 2026 get a higher catch-up of $11,250 (IRS retirement plan limits (COLA)). Deferrals come only through payroll, so they must happen by the last paycheck.

The IRA limit for 2026 is $7,500, plus a $1,100 catch-up from age 50 (IRS retirement plan limits (COLA)). That contribution can wait until April. A Roth conversion cannot: it counts in the year it is done.

A required minimum distribution is the amount you must take each year from an IRA or plan once you reach the required age. The first one can wait until April 1 of the following year, but every later one is due by December 31 (IRS RMD FAQs). Waiting on the first one means two distributions in one tax year.

Giving changed for 2026. Beginning that year, people who do not itemize may deduct up to $1,000 of cash gifts to eligible charities, or $2,000 for married couples filing jointly (IRS, Working Families Tax Cuts provisions). Gifts to donor-advised funds do not qualify for that deduction (IRS, Working Families Tax Cuts provisions). So a non-itemizer giving through a fund should know the gift will not reduce their tax.

Itemizers face the opposite change. From 2026, their charitable gifts count only to the extent they exceed 0.5% of the contribution base, which is AGI figured without an NOL carryback (26 U.S.C. 170). For example, a donor with $200,000 of AGI loses the first $1,000 of gifts for 2026 (26 U.S.C. 170), so check whether grouping two years of gifts into one clears the floor.

Loss sales have a trap. A wash sale is a sale at a loss where you buy substantially identical stock within 30 days before or after the sale, and the loss is not deductible (IRS Publication 550). Ask the broker for the realized gain and loss report in early December, not after the year closes.

A business owner has its own list. Equipment only counts for the year if it is bought and placed in service before the year ends, so keep the invoice and the delivery or installation record. For 2026 the section 179 expensing limit is $2,560,000, reduced once purchases pass $4,090,000 (Rev. Proc. 2025-32). A cash-method business can also time invoices and payments around the year end.

Contractor paperwork is due early in January, so collect it now. The Forms 1099-NEC you file in January 2027 cover 2026 payments, where the line is $2,000 (Forms 1099-MISC and 1099-NEC instructions), not the $600 that applied to 2025 payments (2025 Instructions for Forms 1099-MISC and 1099-NEC). Ask every contractor you paid for a Form W-9 before the year closes; the contractor records checklist shows the rest of the file.

Credits that ended matter too. The home energy credits are not allowed for property placed in service, or expenses made, after December 31, 2025 (IRS, Working Families Tax Cuts provisions). Do not plan a December purchase around them.

1. In November, pull year-to-date pay stubs and a profit and loss statement.
2. Run the projection and adjust withholding or estimates.
3. Confirm deferrals, RMDs, conversions and gifts are booked before the year closes.
4. Review realized gains and losses, and avoid repurchases inside the wash sale window.
5. Collect Forms W-9 and plan the January information returns.
6. Send the January document request so the return can start on time.

• IRS retirement plan limits (COLA): 2026 limits: elective deferrals $24,500, catch-up $8,000 ($11,250 at ages 60 to 63), IRA $7,500 plus $1,100 catch-up.
• IRS Publication 505: Safe harbor at 90% of current-year tax or 100% (110% above $150,000 AGI) of prior-year tax; fourth 2026 payment due Jan. 15, 2027, unless filed and paid by Jan. 31.
• IRS Tax Withholding Estimator: The IRS tool to check whether withholding is on track.
• IRS RMD FAQs: The first RMD can be delayed to April 1 of the following year; later RMDs are due by December 31.
• IRS, Working Families Tax Cuts provisions: From 2026, non-itemizers may deduct up to $1,000 ($2,000 joint) of cash gifts, not to donor-advised funds; 25C and 25D home energy credits end after 2025.
• 26 U.S.C. 170: For taxable years beginning after December 31, 2025, an individual’s charitable deduction is allowed only above 0.5 percent of the contribution base (section 170(b)(1)(I)).
• Rev. Proc. 2025-32: For tax years beginning in 2026, the section 179 limit is $2,560,000, reduced once qualifying property placed in service passes $4,090,000.
• IRS Publication 550: A wash sale is a loss sale with a purchase of substantially identical securities within 30 days before or after; the loss is not deductible.
• Forms 1099-MISC and 1099-NEC instructions: For tax years beginning after 2025, the reporting threshold for certain payments rose to $2,000.
• 2025 Instructions for Forms 1099-MISC and 1099-NEC: For payments made in 2025, Form 1099-NEC reports nonemployee compensation of $600 or more.