Year-End Tax Checklist for 2026: 10 Moves to Make Before December 31

Most tax savings are locked in by what you do before December 31, not by what you find in April. That’s especially true for 2026. Four new deductions phase out as income rises, the ACA subsidy cliff is back, and Medicare premiums depend on income two years back. A few thousand dollars of income can now cost far more than the tax on it.

Here’s what to check in the last quarter of the year, starting with the numbers you need.

Start with your income estimate

Pull your latest pay stub and year-to-date investment statements, then estimate your 2026 adjusted gross income (AGI) and taxable income. Our 2026 tax brackets page shows where each dollar of taxable income falls.

Then check how close you are to these 2026 thresholds. They’re based on modified AGI (MAGI), which for most people is the same as AGI:

If you’re just over one of these lines, the moves below can bring you back under it.

1. Put more into pre-tax retirement accounts

Contributions to a traditional 401(k), 403(b) or 457(b) lower your AGI dollar for dollar. They must come out of your paychecks by December 31, so ask your employer’s payroll or benefits team to raise your contribution now, up to the IRS’s annual limit.

Because they lower AGI, pre-tax contributions help with every threshold in the table above. Roth contributions don’t.

2. Plan Roth conversions around the thresholds

A Roth conversion adds the converted amount to your income for the year. That can be a smart move in a low-income year, but check the side effects before you convert:

• Tax bracket: convert up to the top of your current bracket, not into the next one.
• Senior deduction: each $1,000 of MAGI above $75,000 ($150,000 joint) cuts the deduction by $60 per person. For a single filer in the 22% bracket, that adds about 1.3 percentage points to the tax on converted dollars.
• IRMAA: 2026 conversions count toward your 2028 Medicare premiums.
• ACA: if you buy Marketplace coverage, a conversion can push you over the 400% cliff.

A conversion must be completed by December 31, and it can’t be undone once it’s done. The Roth conversion calculator shows the tax, how much fits in your bracket and whether a conversion triggers IRMAA.

3. Harvest investment losses, or gains

In a taxable brokerage account, selling investments at a loss can offset capital gains, plus up to $3,000 of other income ($1,500 if married filing separately). Unused losses carry forward to future years. Don’t buy the same or a substantially identical investment within 30 days before or after the sale, or the wash-sale rule disallows the loss.

If your taxable income is low, the opposite can make sense: you may be able to sell some long-term gains at a 0% federal capital gains rate. Just remember that gains raise your AGI for the ACA, IRMAA and the phase-outs above.

4. Take your required minimum distribution

If you’re 73 or older, take your required minimum distribution (RMD) from traditional IRAs and 401(k)s by December 31. Your first RMD can wait until April 1 of the following year, but then you’ll take two in one year. Missing an RMD brings an excise tax on the amount you should have taken.

If you’re 70½ or older and give to charity, consider a qualified charitable distribution (QCD): money sent directly from your IRA to a charity. It counts toward your RMD but isn’t included in your income, so it lowers your AGI, which can help with IRMAA and the senior deduction.

5. Rethink charitable giving under the new rules

The 2025 tax law changed charitable deductions starting in 2026:

• If you don’t itemize, you can deduct up to $1,000 ($2,000 on a joint return) of cash gifts to qualifying charities. Gifts to donor-advised funds don’t count.
• If you itemize, only charitable gifts above 0.5% of your AGI are deductible.

If you itemize some years and not others, “bunching” two years of gifts into one year, for example through a donor-advised fund, can still make sense.

6. Tipped workers and overtime earners: keep your records

The no-tax-on-tips and no-tax-on-overtime deductions apply to 2026 income. Before year-end:

• Save your pay stubs, especially the last one of the year, which shows year-to-date overtime.
• Keep your tip records, such as daily tip logs and the tips reported to your employer.
• When your 2026 W-2 arrives in early 2027, look in box 12: code TP shows qualified tips and code TT shows qualified overtime. If the amounts look wrong, ask your employer before you file, and keep your own records as backup.

Only the overtime premium counts: the “half” in time-and-a-half. Our guide on calculating qualified overtime shows how, and the no tax on overtime calculator and no tax on tips calculator estimate your savings.

If you expect these deductions again next year, you can account for them on a new Form W-4 (the deductions worksheet for Step 4(b)) so less tax comes out of each paycheck.

7. Seniors: protect the $6,000 deduction

The senior deduction is up to $6,000 for each person 65 or older by December 31, and you get it whether or not you itemize. It shrinks by 6% of MAGI over $75,000 ($150,000 joint) and disappears entirely at $175,000 ($250,000 joint).

If you’re near the phase-out, a QCD instead of a regular IRA withdrawal, or spreading a large gain across two tax years, can keep more of it. The senior deduction calculator shows your amount and your tax savings.

8. Marketplace enrollees: where will your income land?

For 2026, earning even $1 over 400% of the poverty line ends the premium tax credit, and any advance credit you received must be paid back when you file. If you’re close:

• Update your income estimate with the Marketplace so your advance credit is right.
• Contribute to a traditional 401(k) before December 31.
• Remember that deductible traditional IRA and HSA contributions for 2026 can be made until the April 2027 filing deadline, and they still lower your 2026 MAGI.

The ACA subsidy calculator shows your credit, and our guide to the ACA subsidy cliff covers more ways to stay under it. Open enrollment for 2027 coverage begins November 1.

9. Buying a car? Check the interest deduction

Interest on a loan for a new vehicle whose final assembly was in the U.S. is deductible up to $10,000 a year through 2028, subject to the income phase-out. It applies to the interest you actually pay during the year, so a car bought in December adds only a month or so of interest for 2026. The car loan interest deduction calculator estimates it from your loan terms.

10. Check your withholding and estimated tax

To avoid an underpayment penalty, you generally need to have paid, through withholding or estimated tax, at least 90% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 AGI was over $150,000). The IRS Tax Withholding Estimator shows whether you’re on track.

If you’re short, raising your withholding for the last few paychecks can help, because withholding counts as if it were paid evenly through the year. The fourth-quarter estimated tax payment for 2026 is due January 15, 2027.

What can wait until April?

A few moves still count for 2026 if you make them by the April 2027 filing deadline:

• Traditional and Roth IRA contributions for 2026.
• HSA contributions for 2026, if you had an HSA-eligible health plan.
• SEP-IRA contributions for self-employed people, until the deadline including extensions.

Everything else in this checklist has to be done by December 31.

Sources

• IRS: One, Big, Beautiful Bill provisions
• IRS: Tax inflation adjustments for tax year 2026
• IRS: 401(k) and profit-sharing plan contribution limits
• IRS: Required minimum distributions
• IRS Publication 550, Investment Income and Expenses (capital losses and wash sales)
• IRS Publication 590-B (qualified charitable distributions)
• IRS Tax Withholding Estimator

Key terms

• Adjusted gross income (AGI)
• Marginal tax rate
• Modified adjusted gross income (MAGI)
• Phase-out
• Qualified charitable distribution (QCD)
• Required minimum distribution (RMD)
• Roth conversion
• Senior deduction
• Subsidy cliff
• Wash-sale rule

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