Your End of Year Financial Planning Checklist for 2026
As 2025 comes to a close, it’s an important time to revisit your financials to maximize savings, ensure you start the new year strong, and to stay on track to accomplish your goals. With the recent passing of the One Big Beautiful Bill Act (OBBBA), many traditional year-end planning items should be revisited and re-evaluated in light of the new changes. From managing investment taxes to implementing your charitable giving strategy, here are several financial planning considerations to keep in mind as you prepare for 2026:
Tax Manage Your Investments
Tax loss harvesting. While most markets have performed well this year, we still advocate, when appropriate, realizing losses from underperforming investments to offset current or future capital gains taxes. You could also simultaneously buy a similar, but not substantially identical, position to stay invested to maintain market exposure. Be aware of the wash sale rules. If you don’t want lose exposure to the position, you could buy another lot of the security and then sell the older lot trading at a loss after 31 days. If you don’t have capital gains to offset, you can offset up to $3,000 of ordinary income per year. For those with crypto holdings at a loss, the wash sale rules don’t apply, so investors in theory can sell a losing position to lock in the tax benefit then repurchase the security.
Coordinate tax-aware rebalancing of your portfolio. Additionally, you may want to bring your asset allocation back to their target weights. For those with large concentrated stock positions, you might want to consider harvesting those gains to diversify the outsized position since there are likely losses in other parts of the portfolio to offset the gains. Gain harvesting at the end of 2025 works best if you expect 2026 income to be higher. On the other hand, pushing gain harvesting until early 2026 delays the tax liability another year.
Optimize income and expenses. If possible, we would generally advocate for delaying the receipt of end of year bonuses into 2026 and accelerating expenses into 2025 to potentially lower your 2025 tax bill. Under the OBBBA, the state and local tax (SALT) deduction cap has increased to $40,000, but phases down to $10,000 for taxpayers with incomes between $500,000 and $600,000. Taxpayers with a lot of SALT expenses in this range should carefully consider their options to preserve their SALT deduction by reducing income through retirement contributions, local PTET programs, delaying income, and accelerating expenses.
Re-evaluate your cash holdings. A restrictive Fed has increased rates on cash in saving accounts, money market funds, T-Bills, and CDs over the the last few years. With the Fed now easing, cash yields are generally decreasing, though some providers are decreasing yields faster than others. Now is a good time to reassess your after-tax yield to ensure it remains competitive.
Watch out for mutual fund distributions. Mutual funds distribute capital gains distributions toward the end of the year. If you’re buying into a fund late in the year, check to see if they’ve already made the distribution. You don’t want to essentially buy someone else’s capital gains distributions.
Max out contributions. If possible, ensure that you max out contributions to 401(k)s, IRAs (not due until April 15th), SEPs (due April 15th or extension deadline), Simple IRAs (April 15th deadline) or other qualified accounts.
Consider a Roth conversion. A Roth conversion (December 31 deadline) allows you to move pre-tax IRA funds into a Roth IRA, where future growth and qualified withdrawals are tax-free. The converted amount is taxed as ordinary income in the year of conversion, making this strategy especially attractive if your income is lower than usual and you have cash available to cover the tax liability. Roth conversions also make a lot of sense if you believe your current tax rate is lower than when you are distributing your assets in retirement. That said, Roth conversions in 2025 have become more complex under the OBBBA, as several new tax benefits, such as the enhanced senior deduction, the increased SALT deduction, and the new tips deduction, begin to phase out at higher income levels.
Re-evaluate your marginal rate for tax-exempt bonds. The end of the year is also a good time to reassess your marginal tax rate to determine whether tax-exempt bonds are appropriate for your portfolio. For example, if you’ve had a large increase in income in recent years, your higher marginal rates might make tax-exempt bonds more attractive for your portfolio going forward. The relative value between the tax-exempt and taxable bond markets is perpetually evolving, so evaluating whether tax-exempt bonds in a taxable brokerage account versus taxable bonds in a tax deferred account should be assessed regularly. Pro tip: the tax-exempt bond market usually experiences a sell off in late March and early April as investors raise cash for their taxes, making it a favorable time to buy. Conversely, many tax-exempt bonds pay interest and principal on December 1, January 1, June 1, and July 1, which typically drives prices higher during this time.
Optimize Stock Option Planning. For some founders and employees holding incentive stock options (ISO), the OBBBA changes make executing ISOs in 2025 more favorable than waiting until 2026. Under the OBBBA, the exemption phaseout for married couples filing jointly decreases from $1,252,700 to $1,000,000, and the AMT phaseout decreases at a faster rate (50% versus 25%) as well. One attractive strategy is to run tax projections and exercise only as many ISOs as necessary to avoid triggering the alternative minimum tax (AMT). You should with your advisor and tax professional or financial advisor to evaluate all the considerations.
Review the Basics and Tidy Up Your Accounts
Review health savings accounts (HSA) contributions. You have until the April tax deadline to make an HSA contribution. If you don’t have an HSA, we’d strongly encourage you to explore your eligibility, given the account’s triple tax benefits.
Spend Flexible Savings Account (FSA) remaining balances. Any funds in the account exceeding the $660 maximum carryover that aren’t used by December 31 will be forfeited.
Update your beneficiaries on your retirement accounts and insurance policies. Failing to update beneficiaries can be one of the biggest financial and estate planning blunders one can make. If there’s been a change in your circumstances, it’s important to address this. Furthermore, the SECURE Act effectively ended the “stretch IRA” financial planning strategy for non-spousal beneficiaries, so talk to your advisors about this if you plan on leaving your IRA to someone other than your spouse. For wealthy families, year-end is an ideal time to review estate planning and consider the best ways to transfer assets to the next generation. With families gathering during the holidays, it can also be a good opportunity to hold discussions about legacy, gifting, and estate strategies. Additionally, the end of the year is a great time to inventory high-value personal items, potentially even photographing them for insurance purposes.
Make annual gifts to reduce the size of your estate. The annual gift tax exclusion for 2025 is $19,000. Given that the estate tax exemption will be up to $15 million in 2026, families might want to reconsider aggressive gifting strategies. Many states, like New York, have an estate exemption much lower than the Federal estate exemption. For families that made large irrevocable gifts to trusts in anticipation of a lower estate tax exemption, they might want to consider strategies to bring those assets back into their estate to receive a step-up in basis.
Check your tax withholding and estimated payments. As the year comes to a close, you might want to check with your CPA, or the IRS online withholding estimator, to see if you’re on track with payroll withholding or estimated payments. If you didn’t withhold enough throughout the year from your paycheck or pay enough in estimated payments, you could be subject to an underpayment penalty. Increasing withholding from your salary or Social Security late in the year can help prevent penalties, as the IRS treats these payments as if they were made evenly throughout the year. However, for non-W2 earners, such as business owners, deferring estimated payments to the end of the year could trigger late payment penalties. One way to avoid this is to take an IRA distribution for the purpose of withholding. The IRS will treat the withheld amount as if it were paid evenly throughout the year. You can then redeposit the funds to remain invested and avoid a taxable distribution.
Execute Your Charitable Gifting Strategy
The OBBBA significantly impacts year-end charitable giving strategies. Beginning in 2026, contributors will be subject to a 0.5% of AGI floor on charitable contributions, those in the highest tax bracket (37%) will only get a 35% benefit for itemized deductions, and there will a new above the line charitable deduction for cash contributions up to $2,000 for those filing MFJ ($1,000 for single filers).For high-net-worth donors, the new rules may make it advantageous to accelerate 2026 contributions into 2025. Conversely, lower-income families making cash donations might benefit from delaying their end-of-year 2025 giving into 2026. Here are a few additional charitable strategies to consider:
Donate to a Donor Advised Fund (DAF). If you typically alternate between taking the standard deduction and itemizing, you may want to consider contributing several years worth of planned charitable giving to a donor-advised fund (DAF) in 2025. A DAF allows you to invest the funds and distribute them to charities over time, while taking the tax deduction immediately. For high earners, DAFs can also help minimize the impact of the SALT deduction phaseout. Since the SALT cap drops from $40,000 to $10,000 as income rises from $500,000 to $600,000, a sizable DAF contribution can reduce taxable income and preserve more of your SALT deduction.
Choose how you fund charitable gifts wisely. If you’re making a charitable contribution, it’s preferable from a tax perspective to donate low basis stock to a charity or donor-advised fund as opposed to selling positions and giving cash. Keep in mind that custodians have various deadlines for processing stock or mutual fund donations, especially at year end, so planning ahead is essential. If you’re contributing cash, make sure the funds are received before the end of the year in order to receive the deduction for this year.
Consider a Qualified Charitable Distribution (QCD). Another strategy to minimize your tax burden, for those over 70 1/2 who may no longer itemize, is qualified charitable distribution (QCD). A QCD lets you make a direct distribution of up to $100,000 from an IRA to a charity. A QCD counts toward your required minimum distribution (RMD), which currently begins at age 73, and helps reduce the taxable portion of your distribution. Moreover, it can lessen the tax impact on your Social Security benefits.
Satisfy Private Foundation Distribution Requirements. For families with private foundations, they should make their qualifying distributions, typically 5%, to avoid excise penalties.
Be Mindful of Age Milestones
Over 50: You are now eligible to make a “catch-up contribution” to your IRAs and some qualified plans (401(k), etc.).
Over 55: You are now eligible to take certain types of distributions from your old 401(k)s without penalty.
Over 59.5: You are now eligible to take an IRA distribution without a 10% penalty.
60-63: The catch-up contribution increases in 2025 due to the SECURE 2.0 for those 60 to 63 to an enhanced amount to the greater of $10,000 or 1.5X the catch-up amount in effect ($11,250 in 2025).
Over 62: You are now eligible for Social Security.
Over 65: You are now eligible for Medicare. If you sign up late, you could face a 10% penalty.
Over 73: Required minimum distributions (RMDs) are due on your IRA balances by April 1st the year after you turn 73. There’s a massive 25% penalty if you fail to take the RMD.
Other End of Year ConsiderationsConsider a 529 Reimbursement for New Allowable Expenses under OBBBA. Under the OBBBA, new expenses such as tutoring and professional certifications now qualify for 529 plan reimbursements, so consider reimbursing yourself for these costs before year-end.
Expiring Energy Credits. OBBBA eliminates a whole host of clean energy credits at the end of 2025. For those able to act quickly, there’s a limited-time opportunity to save on purchases such as solar panels and heat pumps.
Review Your Business Entity Structure. The end of the year is a good time to start thinking about whether your business is optimally structured. For example, with a 21% corporate tax rate and the enhanced Qualified Small Business Stock (QSBS) capital gains exclusion, converting to a C corporation may be worth considering for fast-growing, non-service businesses that anticipate a future sale.
Consider OBBBA Business Deductions. Reviewing capital expenditures and budgets in light of the OBBBA should be a high priority. For example, the act allows full expensing of domestic research and development costs, making amendments to prior business returns a potential opportunity. Additionally, domestic manufacturers can now fully depreciate “qualified production property,” making it advantageous to accelerate certain future projects.
David Flores Wilson and Dann Ryan are New York City-based CERTIFIED FINANCIAL PLANNER™ Practitioners & Managing Partners at Sincerus Advisory. Click here to schedule a time to speak with us.
The information provided through this communication is intended solely for the general knowledge of visitors and does not constitute an offer or a solicitation of an offer for the purchase or sale of any security.