10 Year-End Tax Strategies to Maximize Your 2026 Savings

As we approach the end of the year, now is the perfect time to implement strategic moves that can significantly reduce your tax liability. These proven strategies can save you thousands of dollars if executed before December 31st.

1. Maximize Retirement Contributions

One of the most effective ways to reduce taxable income is by maxing out retirement account contributions. For 2026, you can contribute up to $23,000 to your 401(k), or $30,500 if you're 50 or older. Traditional IRA contributions (up to $7,000, or $8,000 for those 50+) can also reduce your taxable income.

Self-employed individuals should consider SEP-IRA or Solo 401(k) contributions, which allow for much higher contribution limits based on your business income.

2. Harvest Investment Losses

Tax-loss harvesting involves selling investments that have declined in value to offset capital gains. You can use up to $3,000 of losses to offset ordinary income, and carry forward additional losses to future years.

Be mindful of the wash-sale rule, which prevents you from claiming a loss if you repurchase the same or substantially identical security within 30 days.

3. Bunch Charitable Contributions

Consider "bunching" two years' worth of charitable donations into one year to exceed the standard deduction threshold. This strategy is especially effective when combined with a donor-advised fund, which allows you to make a large contribution now and distribute it to charities over time.

Donating appreciated securities instead of cash can also provide additional tax benefits by avoiding capital gains taxes.

4. Accelerate Business Expenses

Business owners should review upcoming expenses and consider paying them before year-end. This includes office supplies, equipment repairs, professional fees, and software subscriptions.

Section 179 allows you to deduct the full cost of qualifying equipment purchases (up to $1,220,000 for 2026), rather than depreciating them over time.

5. Fund Health Savings Accounts (HSAs)

If you have a high-deductible health plan, maximize your HSA contributions. For 2026, you can contribute $4,300 for individual coverage or $8,550 for family coverage, with an additional $1,000 catch-up contribution if you're 55 or older. HSA contributions are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses.

6. Convert to a Roth IRA

If you expect to be in a higher tax bracket in the future, consider converting traditional IRA funds to a Roth IRA during a lower-income year. While you'll pay taxes on the conversion now, future qualified withdrawals will be tax-free. This strategy works best when your income is temporarily lower or you have losses to offset the conversion income.

7. Pay Estimated Taxes and Property Taxes

Make your fourth-quarter estimated tax payment before December 31st to deduct it in the current year. You can also prepay property taxes for the upcoming year, though be aware of the $10,000 state and local tax (SALT) deduction cap.

8. Take Required Minimum Distributions (RMDs)

If you're 73 or older, don't forget to take your required minimum distributions from traditional IRAs and 401(k)s before December 31st to avoid the 25% penalty. Consider using the qualified charitable distribution (QCD) strategy to satisfy your RMD while supporting charities and reducing taxable income.

9. Review Employee Benefits

Use any remaining funds in your Flexible Spending Account (FSA) before they expire. Also, review your benefit elections for the upcoming year during open enrollment to maximize tax-advantaged accounts.

10. Schedule a Strategic Tax Planning Meeting

Every taxpayer's situation is unique. Schedule a meeting with your CPA to review your specific circumstances and identify personalized strategies. A professional can help you navigate complex tax laws and ensure you're taking advantage of every available opportunity.