6 Tax Planning Opportunities to Consider Before Year-End

As this year comes to a close, there’s still time to make financial decisions that could reduce your 2026 tax bill and put you in a better position for the year ahead.

Several tax-law changes took effect this year, including new rules for charitable giving, higher deduction limits, and restrictions that may affect higher-income households. Depending on your circumstances, these changes could create new opportunities to save on taxes or change how you approach familiar strategies.

Effective tax planning also means looking beyond this year’s return. The timing of income, investment decisions, and charitable gifts can affect everything from your retirement income to the financial support you provide your family and the organizations you care about.

With many tax-planning deadlines approaching on December 31, here are six opportunities worth considering before year-end.

#1: Make Sure You’ve Paid Enough in Taxes

If your income changed significantly in 2026, it’s worth checking whether your tax withholding and estimated payments are on track.

This is particularly important if you received a large bonus, exercised stock options, sold appreciated investments, or generated income from a business sale. Retirees who receive income from multiple sources, including Social Security, pensions, and investment accounts, may also need to make adjustments.

The IRS generally requires you to pay taxes throughout the year through withholding or quarterly estimated payments. If you haven’t paid enough, you could face an underpayment penalty, even if you pay your remaining balance when you file your return. For the fourth quarter of 2026, the IRS underpayment interest rate is 7% annually, calculated using a daily rate.

One way to address a potential shortfall is to increase your withholding before year-end. If you’re working, you may be able to adjust the amount withheld from your remaining paychecks. If you’re retired, you could potentially increase withholding on a taxable IRA distribution.

For example, suppose you withdraw $20,000 from a traditional IRA. You can generally direct your custodian to send a portion of that distribution to the IRS for federal taxes. Because withholding is typically treated as though it occurred evenly throughout the year, this may help reduce penalties that could otherwise apply to late estimated payments.

Before making changes, work with your CPA to estimate your total tax liability and determine whether you’ve satisfied the IRS safe-harbor requirements.

#2: Take Another Look at Itemized Deductions

If you’ve relied on the standard deduction in recent years, changes to the tax rules may make itemizing more attractive in 2026. You can generally deduct either the standard deduction or your eligible itemized expenses, whichever provides the larger benefit.

For 2026, the standard deduction is:

• $32,200 for married couples filing jointly.
• $16,100 for single filers.
• $24,150 for heads of household.

Additional deductions are available for eligible taxpayers age 65 and older.

One change worth reviewing is the higher limit on deductions for state and local taxes (SALT). In 2026, eligible taxpayers may deduct up to $40,400 in qualifying state and local income or sales taxes and property taxes, compared with the $10,000 limit in effect before 2025.

However, the increased deduction begins phasing down when modified adjusted gross income exceeds $505,000. The deduction generally won’t fall below $10,000, or $5,000 for married taxpayers filing separately.

If you own a home in a high-tax state, have significant property taxes, or pay substantial state income taxes, the higher SALT limit could make a meaningful difference. The important thing is to compare your options using your actual income and expenses. Tax strategies that worked well in previous years may not deliver the same results under the new rules.

#3: Consider the Timing of Deductible Expenses to Reduce Your 2026 Tax Bill

Sometimes, when you incur an expense can be just as important as how much you spend. If your eligible itemized deductions are close to the standard deduction, you may benefit from concentrating certain expenses in one tax year rather than spreading them across multiple years. This strategy is commonly called bunching.

For example, let’s say you typically donate $15,000 to charity each year. Instead of making separate $15,000 contributions in 2026 and 2027, you could contribute $30,000 in 2026 and make fewer donations next year.

Depending on your other deductions, this could allow you to itemize in 2026 and claim the standard deduction in 2027, potentially lowering your combined taxes over both years.

A donor-advised fund (DAF) can be useful if you want to make a larger charitable contribution now while continuing to support your favorite causes over time. With a DAF, you make an irrevocable contribution to the fund and may qualify for a tax deduction in the year you contribute. You can then recommend grants to eligible charities in future years, giving you flexibility over when organizations receive your support.

You may also be able to time certain medical expenses to maximize their deductibility. Keep in mind that qualifying medical expenses are generally deductible only to the extent they exceed 7.5% of your adjusted gross income.

Before accelerating expenses or charitable gifts, be sure to consider whether the potential tax savings justify changing your normal spending or giving schedule.

#4: Revisit Your Charitable Giving Strategy

Supporting the people, organizations, and causes that matter to you can be an important part of your financial plan. New rules for 2026 make it worth reviewing how you give, particularly if charitable contributions are a significant part of your financial life.

If you take the standard deduction: You can now deduct up to $1,000 in qualifying cash donations, or $2,000 if you’re married filing jointly, without itemizing.

This provides a potential tax benefit for people whose charitable contributions previously didn’t qualify for a federal deduction. However, donations to donor-advised funds don’t count toward this new deduction.

If you itemize: A new limitation generally allows you to deduct charitable contributions only to the extent they exceed 0.5% of your adjusted gross income (AGI).

For example, with an AGI of $400,000, the first $2,000 of charitable contributions generally won’t be deductible. If you donate $20,000, you may be able to deduct $18,000, subject to other applicable limits.

Taxpayers in the highest federal income tax bracket also face a new restriction. Although the top marginal income tax rate remains 37%, the tax benefit of itemized deductions is generally capped at 35% for affected taxpayers.

These changes make the structure and timing of your charitable gifts especially important.

If you’re planning a substantial contribution, consider whether it makes sense to give cash, donate appreciated securities, or contribute to a donor-advised fund. For example, donating eligible investments that have increased substantially in value may allow you to support a charity while avoiding the capital gains taxes you might otherwise owe if you sold those investments.

Ultimately, the right approach should reflect both your tax situation and the impact you want your giving to have. A thoughtful charitable giving plan can help you support meaningful causes while making more effective use of your financial resources.

#5: Look Beyond Taxable Income to Your Adjusted Gross Income

When looking for ways to reduce your 2026 tax bill, it’s natural to focus on deductions and taxable income. However, your adjusted gross income (AGI) deserves attention, too.

AGI generally includes income from wages, investments, business activities, and taxable retirement withdrawals, reduced by certain allowable adjustments.

Your AGI can influence several other financial considerations, including:

• Medicare premiums: Higher income may trigger surcharges on Medicare Part B and Part D premiums, generally based on tax information from two years earlier.
• Social Security benefits: Additional income can increase the portion of your Social Security benefits subject to federal income tax.
• Investment taxes: Higher-income households may owe an additional 3.8% net investment income tax on certain investment earnings.
• Tax deductions: Some deductions and tax benefits become less valuable or unavailable as income increases.

Depending on your circumstances, you may be able to manage AGI by making pretax retirement contributions, contributing to an eligible health savings account, deducting qualifying business expenses, or carefully timing investment sales.

If you’re approaching or already in retirement, the timing of IRA withdrawals can be particularly important. A large withdrawal in one year could push your income above certain thresholds, potentially increasing your taxes or Medicare premiums.

It’s also important to understand that not all deductions reduce AGI. Itemized deductions, for example, generally reduce taxable income without lowering AGI.

#6: Use IRA Distributions to Support Charitable Causes and Reduce Your 2026 Tax Bill

If you’re at least age 70½ and have money in an eligible IRA, a qualified charitable distribution (QCD) may offer a tax-efficient way to support organizations you care about. A QCD allows you to transfer money directly from your IRA to an eligible charity without including the qualifying distribution in your taxable income.

For 2026, the annual QCD limit is $111,000 per person. Married couples may be able to contribute up to $222,000 combined if both spouses have eligible IRAs and make qualifying distributions.

Unlike itemized charitable deductions, QCDs aren’t subject to the new 0.5% AGI limitation. You also don’t need to itemize to benefit.

For instance, suppose you normally withdraw $25,000 from your IRA and donate $10,000 to charity. Rather than withdrawing the entire amount and making a separate donation, you could direct $10,000 from your IRA to an eligible charitable organization. That $10,000 would generally be excluded from your taxable income, potentially reducing your AGI and helping you avoid additional taxes or income-related Medicare premium increases.

QCDs can also count toward your required minimum distribution (RMD), making them particularly useful if you’re required to withdraw money from your IRA but don’t need the full amount for living expenses. To qualify, the money must generally go directly from your IRA to an eligible charity. Be sure to coordinate the transfer well before December 31 to allow sufficient processing time.

Make the Most of Year-End Planning to Reduce Your 2026 Tax Bill

With several new tax rules taking effect this year, now is a good time to revisit your financial plan and look for opportunities to reduce your 2026 tax bill before year-end. Of course, tax planning is most effective when it’s coordinated with the rest of your financial life.

At SageMint Wealth, we help you identify opportunities, weigh the tradeoffs, and make informed decisions that support how you want to live and the impact you want to make. Whether you’re working toward a future goal, managing a significant financial transition, or looking for more intentional ways to give, we’re here to help you make the most of your wealth.

Contact us to learn how we can help you live well today and invest in what matters most to you.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.