When it comes to taxes, some of the most important decisions happen before the year ends, not when it's time to file. That's why we encourage clients to review their financial picture in November and December, while there may still be opportunities to make adjustments.
And as always, we believe those conversations are most valuable when your financial advisor and tax professional are working together.
Why This Year Calls for a Closer Look
Several tax provisions enacted in 2025 take effect for the 2026 tax year, including changes to charitable deductions and limitations on itemized deductions for higher earners. Other provisions that began last year remain in place.
Each change may seem relatively straightforward on its own. But when you look at how these rules work together, the impact on your overall tax picture can be more complicated than expected.
And once the year ends, the options for reducing this year's taxes narrow considerably. Only a few opportunities, such as certain IRA and health savings account contributions, remain available after December 31.
Rather than waiting until tax season, we encourage families to look at the full picture now. Here are ten areas worth reviewing before the year comes to a close.
1. Withholding and Estimated Payments
If your income was uneven this year, perhaps from a bonus, equity compensation or the sale of an asset, your tax withholding may not have kept pace. A shortfall can lead to underpayment penalties, even when the full balance is paid at filing.
The good news is that there may still be time to make adjustments. Increasing withholding from a paycheck or retirement account distribution, or making an estimated payment before the relevant deadline, can help address a potential shortfall.
We explored the mechanics in more depth in our guide to checking whether you have paid enough in taxes.
2. Standard Deduction or Itemizing
Each year, taxpayers generally choose between taking the standard deduction and itemizing deductions such as mortgage interest, state and local taxes and charitable contributions.
Recent tax changes have shifted the calculation for some households, making it worthwhile to revisit which approach may be more beneficial.
Rather than assuming last year's strategy still makes sense, consider reviewing your deductions with your tax professional before the year ends.
3. Bunching Deductions
In some situations, it may make sense to group certain deductible expenses, such as charitable contributions, into one tax year rather than spreading them across multiple years.
This approach, often called "bunching," may provide a tax benefit depending on your income and whether you itemize deductions.
Charitable contributions are among the most common expenses considered for this strategy. Certain medical expenses may also play a role, depending on your circumstances.
The key is understanding whether adjusting the timing of these expenses makes sense for your broader financial situation.
4. Charitable Giving Under the New Rules
Charitable giving is an important part of many families' financial and legacy plans, and the rules surrounding charitable deductions have changed for 2026.
Beginning this year, eligible taxpayers who take the standard deduction may deduct up to $1,000 in qualifying cash charitable contributions, or $2,000 for married couples filing jointly.
For those who itemize, new limitations also apply, including a threshold of 0.5% of adjusted gross income before certain charitable contributions become deductible. Higher-income taxpayers may also face additional limitations on the tax benefit of itemized deductions.
For families with ongoing philanthropic goals, these changes make it especially important to consider how and when charitable gifts are made.
At VestGen, we believe charitable giving should be viewed as part of a broader financial and estate planning conversation, particularly when those decisions involve multiple generations or long-term family goals.
5. Qualified Charitable Distributions
For individuals age 70½ or older who hold traditional IRAs, qualified charitable distributions (QCDs) may offer another way to support charitable organizations.
A QCD allows an eligible individual to make a gift directly from an IRA to a qualifying charity. When the applicable requirements are met, the distribution may be excluded from taxable income and can count toward an eligible required minimum distribution.
The recent changes to charitable deductions did not eliminate this option.
For those who do not need their full required distributions for living expenses, a QCD may be worth discussing with their financial advisor and tax professional.
6. Adjusted Gross Income
Your adjusted gross income, often referred to as AGI, is an important number because it can affect several other areas of your financial picture.
For example, AGI and related income calculations can influence Medicare premium surcharges, the taxation of Social Security benefits, certain investment income taxes and eligibility for various deductions and credits.
One important distinction is that many deductions people commonly think about, such as mortgage interest and state and local taxes, generally do not reduce AGI.
That makes it worthwhile to understand which financial decisions may affect this number and how those decisions fit into your broader tax situation.
7. Pretax Contributions
Retirement and health savings contributions are another area worth reviewing before the year ends.
For eligible individuals, pretax contributions to an employer-sponsored retirement plan, deductible traditional IRA contributions and health savings account contributions may help reduce taxable income. Flexible spending account elections can also provide tax advantages when made through an eligible employer plan.
For business owners, qualifying deductible business expenses may also influence the year's taxable income.
Timing matters here. Some contributions, particularly those made through payroll, generally need to be completed before December 31. Others, including certain IRA and health savings account contributions, may be made after year end, subject to applicable deadlines and eligibility requirements.
Understanding which opportunities are still available can make this an especially useful conversation to have in November or December.
8. Realized Gains and Losses
Before the year ends, it may be worth reviewing realized gains and losses in your taxable investment accounts.
Realized investment losses can generally offset realized capital gains and, in some circumstances, a limited amount of ordinary income.
This is often referred to as tax-loss harvesting. However, there are important considerations, including wash-sale rules that may limit the ability to deduct certain losses when substantially identical securities are purchased within a specified period.
While taxes are an important consideration, we believe investment decisions should always be evaluated within the context of your long-term strategy, risk tolerance and financial goals.
9. The Timing of Large Sales
If you're considering the sale of appreciated stock or another significant asset, timing may influence which tax year the gain is recognized.
In some situations, dividing a sale between December and January may spread the resulting income across two tax years, potentially changing the overall tax impact.
Of course, tax considerations are only one part of the decision. Market conditions, liquidity needs, investment concentration and your broader financial goals should also be considered.
This is an area where coordination between your financial advisor and tax professional can be particularly valuable.
10. A Full Projection Before Year End
With different tax rules and deductions tied to income levels, a quick estimate may not tell the whole story.
Working with your tax professional on a year-end projection can help you better understand how these considerations may affect your overall tax situation.
A projection can also bring the other nine items together, showing how decisions involving charitable giving, retirement contributions, investment gains and other financial matters may interact.
It may also be a good time to review your tax records. We recently shared how your IRS account can reveal more of your financial history than you may expect, providing another useful reference point as you prepare for year end.
Bringing It Together
None of these considerations works in isolation.
A charitable gift may affect your itemized deductions. A pretax contribution may influence your adjusted gross income. The timing of an investment sale may affect both your taxable income and other financial planning decisions.
That's why we believe year-end planning is most effective when these decisions are considered together rather than as ten separate items on a checklist.
It's also important to think beyond a single tax year. The decisions you make today should be evaluated in the context of your longer-term plans for retirement income, investments, charitable giving and the legacy you hope to leave for your family.
Frequently Asked Questions
When should year-end tax planning begin?
Ideally, in the fall. Some decisions, such as payroll contributions and adjustments to withholding, require time to implement before December 31. Starting the conversation early provides more opportunity to evaluate available options.
Can taxes for this year still be reduced after December 31?
Some opportunities may remain available. For eligible taxpayers, certain traditional IRA and health savings account contributions can generally be made up to the applicable tax filing deadline. However, many other year-end planning strategies need to be implemented before December 31.
Is bunching deductions right for everyone?
Not necessarily. It depends on your income, charitable giving goals and whether you are likely to benefit more from itemizing deductions or taking the standard deduction. Your tax professional can help evaluate whether this approach makes sense for your circumstances.
Should I make investment decisions for tax reasons alone?
Generally, no. Taxes are an important part of financial planning, but they should be considered alongside your investment strategy, risk tolerance, liquidity needs and long-term goals.
Let's Review Your Year-End Planning Opportunities
Year-end tax planning is about more than checking items off a list. It's an opportunity to look at how your financial decisions fit together, from investments and retirement income to charitable giving and long-term family goals.
At VestGen, we work alongside our clients and their tax professionals to help evaluate these considerations within the context of their broader financial plans.
Have questions about your year-end financial planning? We'd welcome the opportunity to connect and discuss what's most relevant to your situation.
Schedule a Conversation with Our Team
Disclosures
Advisory products and services offered through VestGen Advisors, LLC, a Registered Investment Advisor. Securities offered by Registered Representatives through Private Client Services, Member FINRA/SIPC. Private Client Services and VestGen Advisors, LLC are unaffiliated entities. VestGen Advisors and Private Client Services do not offer legal or tax advice, and information here should not be construed as such. Always consult a legal or tax professional regarding your specific situation. The information provided is for informational and educational purposes only and does not constitute financial or legal advice. VestGen financial advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. Not all of the investments and services mentioned herein are available in every state.
Sources
Laura Saunders, "What You Can Do Now to Cut Your 2026 Taxes," The Wall Street Journal, October 30, 2026.
https://www.wsj.com/personal-finance/taxes/what-you-can-do-now-to-cut-your-2026-taxes-a5d641d7
Internal Revenue Service, One, Big, Beautiful Bill Provisions.
https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions
