6 financial planning opportunities to consider before December 31

As year end approaches, now is a good time to review your financial picture and identify tax planning opportunities to consider before December 31. Decisions involving retirement savings, charitable giving, investment gains and losses and wealth transfers can all affect how much you ultimately keep, give or pass on to others.

The following checklist highlights six areas to review before the end of 2026.

1. Maximize retirement contributions

Start by reviewing your retirement contributions for the year. Tax-advantaged retirement accounts can provide different benefits depending on the type of account: pre-tax contributions may reduce current taxable income, while Roth contributions can provide tax-free qualified withdrawals in retirement.

For 2026, the 401(k) contribution limit is $24,500 and the IRA limit is $7,500. If you have not yet reached the maximum for your workplace retirement plan, consider whether it makes sense to increase the amount you’re setting aside before December 31. IRA contributions for 2026 generally can be made until the federal income tax filing deadline in 2027.

If you’re age 50 or older, you may be eligible to make catchup contributions. The standard 401(k) catch-up is $8,000, while individuals ages 60 through 63 may be eligible for a higher $11,250 catch-up.

Beginning in 2026, some higher earners also face a new rule for these additional contributions. If you earned more than $150,000 in FICA wages (earnings subject to Social Security and Medicare taxes) in 2025 from the employer sponsoring your retirement plan, any catch-up contributions you make to the plan in 2026 generally must be made as Roth rather than pre-tax contributions.

2. Make tax-efficient charitable gifts

I  f charitable giving is part of your year-end plan, consider not only how much you want to give, but also how and when you give.

For 2026, taxpayers who itemize generally can deduct charitable contributions only to the extent their giving exceeds 0.5% of their adjusted gross income. As a result, the timing of charitable gifts may matter more than it has in the past.

One strategy is to bundle several years of planned charitable giving into a single tax year, potentially increasing the amount eligible for a deduction. A donor-advised fund (DAF) can facilitate this approach by allowing you to make a larger charitable contribution now, claim the available deduction this year and recommend grants to charities over time—combining immediate tax benefits with long-term flexibility.

Also consider what assets you give. Donating appreciated securities such as stocks or mutual funds rather than cash can allow you to avoid realizing the embedded capital gains  while receiving a charitable deduction based on the asset’s fair market value.  

3. Review your state and local tax (SALT) deduction

The expanded state and local tax (SALT) deduction creates another year-end planning opportunity, particularly for taxpayers whose income is near the phase-down threshold.

For 2026, the SALT deduction is capped at $40,400 and begins to phase down for taxpayers with modified adjusted gross income above $505,000, although the deduction cannot be reduced below $10,000.

If your income is near the SALT deduction phase-down threshold and you anticipate a significant change in income next year, consider whether the timing of state or local income and real estate tax payments could affect your available deduction. If your income exceeds the threshold this year, it may be more advantageous to defer those tax payments until next year, when you may regain eligibility for a larger deduction.

4. Manage your tax bill through investment gains and losses

Year end is a good time to review your portfolio for opportunities to reduce the taxes you may owe on investment gains.

If you have realized capital gains during the year, discuss with your portfolio manager whether it makes sense to sell investments that have declined in value. Those losses can offset capital gains and potentially reduce your tax bill. If your losses exceed your gains, up to $3,000 of net capital losses generally can be used to offset ordinary income, with additional losses carried forward to future years.

The reverse may also be worth considering. If 2026 is an unusually low-income year, you may have an opportunity to sell appreciated investments and recognize gains while you are in a lower tax bracket. Depending on your taxable income, some long-term capital gains may qualify for the 0% or 15% federal rate.

Tax considerations should be weighed alongside your investment objectives when deciding whether to sell an asset.

5. Revisit your estate plan under today's higher federal exemption

With federal estate tax exemptions at $15 million per individual in 2026, now may be a good time to revisit older estate planning documents. Keep in mind that some states impose their own estate or inheritance taxes, often with different exemption amounts and rules. As part of that review, consider whether your wills, revocable trusts, powers of attorney and healthcare directives to ensure they reflect your current wishes and relationships.

Pay close attention to credit shelter or bypass trust structures (also commonly known as A/B Trusts, or Family Trusts, or Exemption Trusts) that were drafted when exemption levels were much lower. Under today’s higher exemption and portability rules, some families can simplify their estate plans, potentially capturing greater step-up in cost basis at the second death—or, in community property states, at both deaths.

Review older documents drafted for a lower-exemption world to ensure they don’t trap low basis in vehicles that won’t be includible in the survivor’s estate (and thus won’t receive step-up). 

6. Use annual exclusion gifts for estate tax planning

For families likely to be subject to estate tax, annual exclusion gifts can be a straightforward way to transfer assets out of the taxable estate over time.

The annual exclusion gift rule allows anyone to give up to a certain amount each year to any individual without incurring gift tax or using any of their lifetime estate tax exemption. For 2026, the annual exclusion amount is $19,000 per recipient. You can make as many $19,000 gifts as you wish to different people, generally without using your lifetime exemption or triggering a gift tax filing requirement.

If you give more than $19,000 to any one person in a year, you must file IRS Form 709, but you will owe no gift tax unless your total lifetime taxable gifts exceed your lifetime exemption ($15 million per person in 2026).

It’s important to note that if your estate is not large enough to be subject to estate tax, annual exclusion gifts do not actually save any tax. While they may serve personal or financial planning purposes, such as helping family members, they do not reduce your tax liability. In that case, you are simply transferring assets sooner.

Turn year-end deadlines into longer-term planning opportunities

As 2026 draws to a close, the weeks ahead present an important opportunity to review your financial picture—retirement savings, charitable giving, investment positioning and estate strategy—to ensure you’re taking full advantage of current tax benefits before December 31.