Year-End Tax Planning Checklist for 2026

Year-end tax planning used to follow a familiar script: max the 401(k), give to charity, buy the truck before the depreciation rules got worse. For year-end 2026, the script needs a rewrite. This is the first December under the new tax law's steady state — a new floor under charitable deductions, a lower ceiling on business losses, energy credits that are simply gone, and equipment rules that finally don't expire. Here's our year-end checklist, fully refreshed for the 2026 tax year — built for moves you can still make before December 31, 2026.

What makes year-end 2026 different?

Five changes reshape the playbook this year:

1. Charitable deductions got a floor. Starting with 2026 returns, itemizers only deduct giving that exceeds 0.5% of AGI — the first slice of every year's generosity is now absorbed. Meanwhile, non-itemizers get something new: an above-the-line deduction of up to $1,000 ($2,000 joint) for cash gifts to qualifying charities (donor-advised funds don't count).
2. Top-bracket itemizers lost a little altitude. Beginning in 2026, itemized deductions are worth at most 35 cents on the dollar for taxpayers in the 37% bracket — relevant if you're deciding which year absorbs a large deduction.
3. The excess business loss ceiling dropped. For 2026, large business losses offset at most $256,000 (single) / $512,000 (joint) of non-business income — down from $313,000/$626,000 in 2025, because the law reset the inflation base. The excess becomes a carryforward, not a current deduction.
4. Energy credits are off the board. The EV credits ended September 30, 2025, and the home energy credits (solar, heat pumps, windows) ended December 31, 2025. If an installer promises you a 2026 federal credit for these, that's outdated paper.
5. The new personal deductions are live — tips, overtime, the $6,000 senior deduction (65+), and a SALT cap of $40,400 for 2026 (phasing down toward $10,000 once MAGI passes $505,000). Full rundown in our 2026 tax changes hub.

Which deadlines are truly December 31 — and which can wait?

Half of year-end stress comes from conflating these two lists.

What retirement moves should you lock in first?

Retirement contributions remain the most reliable deduction in the book, and 2026 limits are higher:

• 401(k): up to $24,500 of employee deferrals, plus an $8,000 catch-up at 50+. Ages 60–63 get the larger $11,250 catch-up for 2026. Check your year-to-date on the next pay stub — December is the last payroll you can adjust.
• One new wrinkle: starting in 2026, if your prior-year wages from your employer were high (roughly $150,000, indexed), catch-up contributions generally must go in as Roth. Don't be surprised when payroll reroutes them — it's the law, not an error.
• IRA: $7,500 for 2026 ($1,100 catch-up at 50+), fundable until April 15, 2027 — deductibility depends on income and workplace-plan coverage.
• HSA: $4,400 self-only / $8,750 family for 2026 if you're on a qualifying high-deductible plan — deductible in, tax-free out for medical costs, also open until April 15, 2027.
• Self-employed: a solo 401(k) rewards acting now (deferrals ride on 2026 compensation), while a SEP-IRA can be set up and funded as late as your extended filing deadline.

How should you give to charity under the new floor?

The 0.5% floor changes strategy more than generosity. A hedged illustration: a couple with $250,000 of AGI gives $6,000 every year. From 2026 on, the first $1,250 (0.5% × $250,000) of each year's gifts is absorbed by the floor — deducting $4,750 per year, $9,500 over two years. If they bunch $12,000 into 2026 instead, they cross the floor once and deduct $10,750 — then take the standard deduction ($32,200 joint for 2026) in the off year. Same generosity, roughly $1,250 more deducted, before even counting the standard-deduction interplay that often makes bunching worth more. Actual results depend on your full return — model it, don't eyeball it.

The rest of the giving playbook, updated for 2026:

1. Bunching now beats annual dribbles for itemizers — the floor taxes frequency.
2. Appreciated stock still wins: deduct fair value, skip the capital gain — doubly attractive in a strong market year.
3. Non-itemizers should still keep receipts — the $1,000/$2,000 above-the-line deduction requires cash gifts to operating charities (not DAFs).
4. Age 70½+ with an IRA? Qualified charitable distributions send money directly from IRA to charity, count toward RMDs, and never touch AGI — which also sidesteps the new floor entirely (the annual QCD cap is indexed; it was $108,000 in 2025).
5. In the 37% bracket, remember the 35% value cap when choosing which year should carry a major gift.

What should business owners do before December 31?

• Equipment: buy for the business case, time for the tax case. With 100% bonus depreciation permanent (and Section 179 at $2,560,000 for 2026), there's no expiring provision forcing a December purchase. The real question is which year needs the deduction — and remember, assets must be placed in service, not just ordered, by December 31.
• Model the loss ceiling before stacking deductions. If 2026 is already a loss year, piling on more write-offs may just bank carryforwards once you hit the $256K/$512K limit. Sometimes right, never automatic.
• Run bonuses and S-corp owner health premiums through December payroll. The premium-in-W-2 step protects the owner's deduction and cannot be gracefully fixed in February.
• Check your withholding against the new deductions. If tips, overtime, or the senior deduction apply to your household, your 2026 withholding may be overshooting — a W-4 tweak or a lighter Q4 estimate keeps the cash working for you now.
• Note the new 1099 threshold. Payments made in 2026 are reportable at $2,000 (up from $600) — fewer forms this January, same obligation to collect W-9s first.

What about investments and income timing?

1. Harvest losses against gains (plus up to $3,000 of ordinary income), and respect the wash-sale rule — it covers the 30 days before and after the sale — when rebuying.
2. Harvest gains if your taxable income lands in the 0% long-term capital gains bracket for 2026 — retirees and low-income years waste this constantly. Selling and rebuying winners has no wash-sale problem and resets basis upward.
3. Convert to Roth in soft years. A below-normal income year is the cheapest Roth conversion you'll ever get — but conversions are irreversible and due by December 31, so size them with projections, not vibes.
4. Time income around the SALT phasedown. Between $505,000 and roughly $606,000 of MAGI, each extra dollar also claws back SALT deduction — an effective-rate spike zone where deferring a bonus or accelerating a deduction earns more than the sticker rate suggests.

One honest caveat: a checklist can flag the moves, but the interactions — floor vs. bunching, EBL vs. equipment, conversion vs. phaseouts — are where the actual dollars live, and they differ on every return. That modeling is the whole product of a good year-end session. Problems come here to get solved. Our advisory team runs these projections every November and December, at flat rates listed on the pricing page.

FAQ

Is December too late to start?

No — most of the list above works in the final week of the year, including deferral changes, gifts, harvesting, and conversions. What December can't fix is a full year of over- or under-withholding; that's a January-through-October project.

Should I buy equipment just for the deduction?

No. Spending $1 to save roughly 24–37 cents only makes sense when the business needed the asset anyway. The deduction sweetens good purchases; it cannot redeem unnecessary ones — permanent bonus depreciation just means you no longer have to rush the good ones.

Do the tips and overtime deductions require action by December 31?

Not on your return — they're claimed at filing. But check now that your employer is tracking qualified tips and FLSA overtime premium separately for the new W-2 codes; a wrong W-2 in January is far harder to fix than a payroll setting in November.

Should I prepay 2027 state taxes in December 2026?

Only with the cap math in front of you: the 2026 SALT ceiling is $40,400, prepayments can't exceed what's genuinely owed, and above $505,000 of MAGI the deduction phases down toward $10,000 — where prepaying buys little. This one's a calculator decision, not a rule of thumb.

What's the single most commonly missed item on this list?

RMDs and the S-corp health-premium W-2 step tie for first, and both share a trait: hard deadlines, ugly fixes. If you only verify two things before New Year's, verify those.

Reviewed by the WAYG tax team · Updated July 2026