Year-End Tax Planning: 12 Moves to Make Before Dec. 31

Year-end tax planning means finishing the moves that cut your 2026 tax bill by December 31. The list includes a Roth conversion, a required minimum distribution, gains or losses in a brokerage account, and gifts to charity or family.

Retirees have more of these moves than most people, and the stakes run past this year. A conversion in December can shrink a deduction this year and raise Medicare premiums two years from now. New rules for 2026 also change how charitable gifts get deducted, for itemizers and non-itemizers alike.

Here are 12 moves to make before the year ends, with the 2026 numbers that decide whether each one pays off.

What Tax Moves Have to Happen by December 31?

Most year-end tax moves have to be finished by December 31 to count for 2026. The table shows each move, its deadline, and who it helps most.

Source: IRS Notice 2025-67 and Revenue Procedure 2025-32; IRS required minimum distribution FAQs.

Three accounts get more time. You can put 2026 money into an IRA, a Roth IRA, or an HSA until April 15, 2027.

Is a Roth Conversion Before Year-End Right for You?

A year-end conversion makes sense when this year’s tax rate is lower than the one you expect later. It has to be finished by December 31 to count for 2026. Since 2018, a conversion can’t be reversed with a recharacterization.

A Roth conversion moves money from a pre-tax account into a Roth. You pay income tax on the amount now, and qualified withdrawals come out tax-free later. Smaller balances in pre-tax accounts also mean smaller RMDs once they start.

The best years to convert are often the ones between retirement and the start of RMDs and Social Security, when taxable income dips. Year-end is when you know your income for the year well enough to size a conversion. Some people spread conversions through the year instead.

What Else Does a Conversion Change?

A conversion raises your modified adjusted gross income (MAGI). For 2026, that can cost you in two ways:

• The senior deduction. The extra $6,000 deduction for people 65 and older shrinks as MAGI rises, so a conversion can cost you part of it.
• Medicare premiums. A large conversion can push your 2028 premiums into a higher IRMAA tier.

The Boldin Roth conversion calculator compares the tax on converting up to a bracket or a dollar amount against doing nothing. The Roth Conversion Explorer, part of PlannerPlus, goes further. You can set it to stay under an IRMAA limit or to pay the least tax over your lifetime.

Have You Taken Your RMD for 2026?

Required minimum distributions are due by December 31 each year once you reach 73. If you were born in 1960 or later, they start at 75. Your first RMD can wait until April 1 of the following year. That delay means two RMDs in one tax year, which can push you into a higher bracket.

Missing an RMD costs 25% of the amount you didn’t take. The IRS cuts that to 10% if you correct it within two years. Misses aren’t rare. A 2015 Treasury Inspector General report on IRA compliance found nearly 639,000 taxpayers who may not have taken required distributions in 2012.

Do Inherited IRAs Need an RMD This Year?

Many heirs do. Say you inherited a pre-tax IRA or 401(k) after 2019 from someone who had already started RMDs. Unless you’re a spouse or another eligible designated beneficiary, you’ll take a distribution each year. You also have to empty the account by the end of the 10th year after the year of death. The IRS waived penalties for missed annual distributions through 2024 and stopped waiving them in 2025.

Can a Charitable Gift Count Toward Your RMD?

A qualified charitable distribution (QCD) sends money from your IRA to a charity and counts toward your RMD. The amount stays out of your taxable income. In 2026, people 70½ and older can give up to $111,000 this way.

When Does Harvesting Capital Gains or Losses Pay Off?

Capital gains and losses count for the year you sell. If your income is low, selling winners can be tax-free. If it’s high, selling losers can offset gains and a little ordinary income.

Taking Gains at 0%

In 2026, long-term gains are taxed at 0% up to a taxable income line. That line is $49,450 for single filers and $98,900 for joint filers. Retirees who’ve stopped working but haven’t started Social Security or RMDs often have room under that line.

You can sell appreciated shares, pay no federal tax on the gain, and buy them back to reset your cost basis. Gains stack on top of your other income. If a gain pushes you past the line, the part above it gets taxed at 15%.

Selling Losses

Losses in a taxable account offset gains first. Up to $3,000 of leftover losses can offset ordinary income, and the rest carries forward to future years.

Watch the wash-sale rule. Buying the same or a substantially identical investment within 30 days before or after the sale blocks the loss this year. It gets added to the cost basis of the new shares instead.

How Did Charitable Giving Change for 2026?

The One Big Beautiful Bill Act (OBBBA) changed how charitable gifts get deducted starting in 2026. Non-itemizers get a new deduction, and itemizers lose a small slice of theirs.

• If you take the standard deduction, you can now deduct up to $1,000 in cash gifts to charity, or $2,000 on a joint return. Gifts to donor-advised funds don’t qualify.
• If you itemize, the first 0.5% of your AGI in charitable gifts isn’t deductible. On $150,000 of AGI, that’s the first $750.

The floor makes bunching more useful. Bunching means giving two or three years of donations in one year, so your itemized deductions clear the standard deduction. In the off years, you take the standard deduction. One big giving year takes the 0.5% hit once. Spreading the same gifts over three years takes it three times.

A donor-advised fund makes bunching easier. You put several years of giving into the fund this year, take the deduction now, and send grants to charities over time. Fidelity Charitable says contributions must arrive by December 31 to count for this year, so start early.

If you’re 70½ or older, compare both with a QCD from your IRA, covered in the RMD section above.

Is Itemizing or the Standard Deduction Better for You This Year?

Most retirees take the standard deduction, and turning 65 makes it bigger. Itemizing wins when your mortgage interest, state and local taxes, charitable gifts, and medical costs add up to more.

Source: IRS Revenue Procedure 2025-32.

The $6,000 Senior Deduction

From 2025 through 2028, people 65 and older can deduct an extra $6,000 each, whether or not they itemize. The deduction phases out at 6% of MAGI above $75,000 for single filers and $150,000 for joint filers. Married couples have to file jointly to claim it.

State and Local Taxes

The cap on deducting state and local taxes is $40,400 for 2026. It shrinks once MAGI passes $505,000, but it doesn’t drop below $10,000. Retirees in high-tax states who stopped itemizing under the old $10,000 cap may come out ahead itemizing again.

Medical Costs and Long-Term Care Premiums

You can deduct medical costs above 7.5% of AGI if you itemize. Are this year’s bills already high? Moving a planned procedure or dental work from January into December can push more of it over the line.

Premiums for long-term care insurance count as medical costs, up to a limit that rises with age:

Source: IRS Revenue Procedure 2025-32.

If your income reaches the 37% bracket, your itemized deductions are trimmed for 2026, so each dollar saves you about 35 cents. That applies to every itemized deduction, charity included.

What Can You Still Contribute for 2026 If You’re Working?

Workplace plan contributions for 2026 have to come out of a 2026 paycheck. IRA and HSA contributions can wait until April 15, 2027.

Source: IRS Notice 2025-67; IRS Revenue Procedure 2025-19.

Starting in 2026, catch-up contributions for higher earners have to go in as Roth. That applies if you earned more than $150,000 from your employer in 2025. Ask your plan administrator how they’re handling it.

Roth IRA contributions phase out between $153,000 and $168,000 of MAGI for single filers. For joint filers, the range is $242,000 to $252,000. Above those ranges, a backdoor Roth can still get money into a Roth. You make a nondeductible IRA contribution, then convert it. If you hold pre-tax IRA money, the pro-rata rule makes part of the conversion taxable.

Early retirees on marketplace coverage have a new option. Starting in 2026, bronze and catastrophic plans count as HSA-eligible. That means you may be able to open or fund an HSA.

Still working and expecting lower income next year? Ask early whether your year-end bonus can be paid in January, since the timing has to be set before it’s payable. The income then lands in the lower-tax year.

How Does This Year’s Income Affect Your Medicare Premiums?

Medicare sets Part B and Part D premiums from your income two years earlier, so 2026 income sets your 2028 premiums. For 2026, surcharges start above $109,000 of 2024 MAGI for single filers and $218,000 for joint filers. Each IRMAA tier raises what you pay for a full year.

A conversion, a large capital gain, or a big IRA withdrawal can cross a tier by a few dollars. Check where your 2026 income lands before December 31.

Two other taxes start at fixed income lines. The 3.8% net investment income tax applies to investment income once MAGI tops $200,000 for single filers or $250,000 for joint filers. The 0.9% Additional Medicare Tax applies to wages above the same amounts. Neither threshold rises with inflation, so more retirees cross them each year.

Are Your Social Security Benefits Taxed, and Does Your State Tax Them?

Up to 85% of your Social Security benefits can be federal taxable income. It depends on your combined income: your AGI, plus tax-exempt interest, plus half your benefits.

• Below $25,000 (single) or $32,000 (joint), none of your benefits are taxed.
• Between those lines and $34,000 (single) or $44,000 (joint), up to 50% is taxed.
• Above $34,000 (single) or $44,000 (joint), up to 85% is taxed.

These thresholds don’t rise with inflation, so a December IRA withdrawal or capital gain can make more of your benefit taxable.

Eight states tax Social Security benefits in 2026: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont. Several offer exemptions or credits based on age or income. West Virginia finished phasing out its tax this year.

How Can Year-End Gifts to Family Cut Future Taxes?

In 2026 you can give up to $19,000 to each person without filing a gift tax return. A married couple can give $38,000 to each person from their own funds or a joint account. If all the money comes from one spouse, splitting the gift takes a Form 709.

Timing helps. Say you want to give your niece $25,000 toward her first home. You could give $19,000 in December and $6,000 in January. Both gifts stay under the limit, and you skip Form 709. Even above the limit, few people owe gift tax, since the lifetime exemption is $15 million per person in 2026. You’d still file the form.

A few accounts make family gifts go further:

• 529 plans. Earnings grow tax-free for education. Starting in 2026, families can use up to $20,000 a year for K-12 costs. Leftover money can roll into the beneficiary’s Roth IRA once the account has been open 15 years. The lifetime cap is $35,000.
• Trump accounts. These new accounts for children opened to contributions on July 4, 2026. Family members and others can add up to $5,000 a year combined.

Do You Still Need to Worry About the AMT?

Few retirees owe the alternative minimum tax. In 2026, the AMT exemption is $90,100 for single filers and $140,200 for joint filers. It starts phasing out at $500,000 and $1 million of income. Exercising incentive stock options is the most common trigger, so check with a tax pro before exercising in December.

When Does It Make Sense to Get Professional Help?

A tax pro earns the fee in years with several moving parts. Think of your first RMD, a large conversion, a home sale, or a move to a new state. Look for a CPA or an enrolled agent who works with retirees.

A CERTIFIED FINANCIAL PLANNER™ can help you plan these moves across years, beyond filing this year’s return. Boldin Advisors offers fee-only planning with CFP® professionals.

How Can You Test Year-End Moves Before You Make Them?

Each move on this list changes more than this year’s tax bill, which is why retirement tax planning works best across several years. A conversion shifts your future RMDs and Medicare premiums. A gain changes how much of your Social Security is taxed. Seeing those effects together keeps a December decision from turning into a surprise in April.

The Boldin Planner projects your taxes in every year of retirement. You can add a conversion or an extra withdrawal and see how your taxes and net worth change. With PlannerPlus, the Roth Conversion Explorer and tax projections that include Medicare surcharges let you test a year-end move before you make it.

Year-End Tax Planning: FAQ