How to Prepare for Tax Season Before the Year Ends
While tax season doesn’t officially start until April, many of the decisions that shape your tax bill happen months earlier.
The 2026 tax year introduces several changes to consider, including an increased State and Local Tax (SALT) deduction cap and new requirements for certain retirement catch-up contributions. The key is identifying which tax-planning opportunities are still available before the end of the year, particularly those with December 31 deadlines.
A good place to start is by talking with your professional advisors about an estimate of what you may owe for the year. From there, you can determine which of the strategies below may be appropriate for your individual circumstances.
Harvest Tax Losses
Strong financial market performance this year may have resulted in realized gains, potentially increasing your tax liability. If that’s the case, reviewing your portfolio for investments that could be sold at a loss before year-end may help reduce the amount you owe.
Tax-loss harvesting is a long-standing strategy that involves selling an investment that has declined in value. The resulting loss can be used to offset gains that have already been realized, as well as embedded gains that may be realized now or in the future. (1)
If you continue to see value in an investment after selling it, you may be able to repurchase the security, but you need to pay close attention to the wash sale rule. Under this rule, you generally cannot claim a loss for the current tax year if you purchase a “substantially identical” security within 30 days before or after the date of the sale that generated the loss. (1)
It is also worth remembering that tax-loss harvesting does not have to be reserved for December. Reviewing your portfolio throughout the year can help you identify potential harvesting opportunities. Even in an overall rising market, differences in how individual investments perform could create opportunities to harvest losses. (1)
Refine Your Charitable Giving Strategy
Changes to the deductibility of charitable contributions, particularly for individuals in the highest income tax bracket, make it important to consider taking a closer look at how and when you give. For some taxpayers, concentrating charitable contributions into a single year may make more sense if doing so allows their total donations to exceed the new 0.5% adjusted gross income (AGI) floor for charitable contributions. (2)
Fall can also be a practical time to review retirement account contributions. Beginning earlier gives you several months to work toward maximizing your contributions rather than trying to make a larger contribution all at once near year-end. (3)
Roth conversions may also be worth visiting in the fall. By this point in the year, you typically have more complete income information, and getting started earlier can help reduce the risk of administrative delays or year-end processing backlogs. (3)
During open enrollment, consider checking your progress with your Flexible Spending Account (FSA) or Health Spending Account (HSA). Higher earners should also consider monitoring their Net Investment Income Tax threshold, while business owners may want to review Qualified Business Income (QBI) phase-outs. If you do not have formal withholding through an employer, September 15 marks your final estimated tax payment deadline and an opportunity to catch up and potentially avoid underpayment penalties. (3)
What's Different for the 2026 Tax Year
Several changes are particularly relevant for 2026 tax planning. The SALT deduction cap increased to $40,400, with a phase-down beginning at $505,000 of modified adjusted gross income. For higher earners age 50 and older with FICA wages above $150,000, the Roth catch-up rule now requires catch-up contributions to be made as Roth contributions rather than pre-tax contributions. The estate and gift tax exemption also increased to $15 million per individual, or $30 million per couple. Standard deduction amounts increased as well. (3)
Why Timing Matters
Many tax decisions made by December 31 ultimately become part of the return you file the following spring. Once the year ends, some opportunities to change how income and deductions are treated may disappear. (3)
One of the central considerations in year-end tax planning is whether to accelerate or defer income and deductions. Depending on your circumstances, you may have some ability to determine whether a gain, contribution, or deduction falls into the current tax year or the next. The better timing can depend on whether you expect to be in a higher or lower tax bracket in either year. (3)
For example, someone who anticipates having lower income next year may choose to defer a bonus or Roth conversion until the following year to potentially benefit from the lower tax rate. Conversely, someone expecting a raise or a one-time financial windfall next year may consider accelerating a deduction into the current year. (3)
There is no single strategy that applies to everyone. The appropriate timing depends on your income, anticipated changes in your life, and whether you expect a significant one-time event, such as a business sale or inheritance. Understanding the difference between accelerating and deferring income or deductions helps put the more specific year-end strategies into context. (3)
The Bottom Line
The months leading up to December 31 can play a significant role in determining the tax picture you ultimately see the following spring. The strategies that make sense will depend on your individual circumstances, and decisions made during the fall can affect investment planning, retirement income, and estate planning at the same time.
If you do not currently work with a financial advisor, the fall may be a useful time to begin the conversation. An advisor can help coordinate your retirement, tax, and estate planning strategies so that decisions made in one area complement your broader financial plan. For high earners, tax-efficient investment strategies may also help reduce the impact taxes can have on portfolio returns.
Frequently Asked Questions About 2026 Year-End Tax Planning
When should I start planning for my 2026 taxes?
Fall is an important time to begin reviewing your tax situation because many tax-planning decisions need to be made before December 31. Starting earlier can also give you more time to evaluate your options and coordinate with your financial and tax professionals.
What is tax-loss harvesting?
Tax-loss harvesting involves selling an investment that has declined in value and using the resulting loss to offset realized gains or certain gains that may be realized in the future. (1)
Can I buy an investment back after using tax-loss harvesting?
Potentially, but you need to consider the wash sale rule. Generally, a loss may not be available for the current tax year if you purchase a “substantially identical” security within 30 days before or after the sale that generated the loss. (1)
Is tax-loss harvesting only useful at the end of the year?
No. Tax-loss harvesting can be considered throughout the year. Reviewing your portfolio regularly may help you identify opportunities when individual investments have declined, even when the broader market is performing well. (1)
What is the new SALT deduction cap for 2026?
For 2026, the SALT deduction cap increased to $40,400, with a phase-down beginning at $505,000 of modified adjusted gross income. (3)
What changed for retirement catch-up contributions in 2026?
For higher earners age 50 and older with FICA wages above $150,000, the Roth catch-up rule now requires catch-up contributions to be made as Roth rather than pre-tax contributions. (3)
Why might someone consider a Roth conversion before the end of the year?
Beginning a Roth conversion earlier in the fall can provide more accurate income information and may help avoid administrative delays or year-end processing backlogs. (3)
What does it mean to accelerate or defer income?
Accelerating income or a deduction generally means moving it into the current tax year, while deferring it means moving it into the following year. Which approach may make sense depends in part on your expected income and tax bracket in each year. (3)
How can charitable giving affect my tax planning?
Changes to charitable deduction rules may make the timing of charitable contributions more important for some taxpayers. Depending on your circumstances, concentrating donations into a single year may help you exceed the new 0.5% AGI floor for charitable contributions. (2)
What other tax-planning items should I review before year-end?
In addition to investments, charitable giving, and retirement contributions, you may want to review your FSA or HSA progress, Net Investment Income Tax thresholds, QBI phase-outs if you own a business, and your estimated tax payments if you do not have employer withholding. (3)
Should I work with a financial advisor on year-end tax planning?
Tax planning can involve several areas of your financial life, including investments, retirement income, and estate planning. A financial advisor can help coordinate these areas with your broader financial plan, while your tax professional can provide guidance specific to your tax situation.
Article Sources:
(1) Ludman, Adam and Jordan Sprechman. “5 year-end tax-planning actions to take before 2026,” J.P. Morgan Private Bank. October 17, 2025. https://privatebank.jpmorgan.com/nam/en/insights/markets-and-investing/ideas-and-insights/5-year-end-tax-planning-actions-to-take-before-2026. Accessed September 22, 2026.
(2) Backer Lyons, Sarah, and Jordan Sprechman. “Get ready for 2027: 10 planning moves to consider,” J.P. Morgan Private Bank. September 14, 2026. https://privatebank.jpmorgan.com/nam/en/insights/markets-and-investing/ideas-and-insights/get-ready-for-2027-10-planning-moves-to-consider. Accessed September 22, 2026.
(3) “Year-End Tax Planning: How Fall's Decisions Shape Your Tax Bill,” LPL Financial. September 18, 2026. https://www.lpl.com/investors/investment-essentials/investing/year-end-tax-planning-and-fall-financial-decisions.html. Accessed September 22, 2026.