The end of the year may still feel far away, but when it comes to tax planning, waiting until December can limit your options.
Tax planning is most effective when it is proactive. Reviewing your income, investments, retirement accounts, charitable giving, and other financial decisions now provides time to identify opportunities and make thoughtful adjustments before December 31.
For 2026, updated tax brackets, deductions, and retirement contribution limits make this an especially good time to review your strategy.
Start With Your Income
Your income can look very different from one year to the next, particularly in retirement or when a significant financial event occurs.
Investment gains, required minimum distributions, business income, bonuses, stock compensation, retirement account withdrawals, and other sources can all influence your taxable income.
Reviewing where you currently stand can help you estimate your income for the full year and determine whether there are planning opportunities before the end of the year.
Review Your Investment Portfolio
Taxes should not drive every investment decision, but they are an important part of managing a portfolio.
If you have investments that have declined in value, tax loss harvesting may provide an opportunity to offset realized capital gains. At the same time, appreciated investments may require additional planning before they are sold.
This is also an opportunity to review whether your portfolio remains aligned with your investment strategy. Rebalancing, managing gains and losses, and evaluating concentrated positions can all be considered together rather than as separate decisions.
Evaluating Retirement Account Strategies
Retirement accounts can provide several year-end planning opportunities.
For 2026, the employee contribution limit for 401(k), 403(b), and most governmental 457 plans are $24,500. Those ages 50 and older may generally contribute an additional $8,000, while individuals ages 60 through 63 may qualify for a higher catch-up contribution of $11,250.
The IRA contribution limit is $7,500 for 2026, with an additional $1,100 available for those age 50 and older.
Depending on your circumstances, this may be a good time to review whether you are on track with your retirement contributions and whether adjustments should be made before the end of the year.
Consider Roth Conversion Opportunities
A Roth conversion can move assets from a traditional retirement account into a Roth IRA. The converted amount is generally included in taxable income for the year, which makes tax planning particularly important.
Rather than deciding on a conversion in isolation, consider your projected taxable income, current tax bracket, future retirement income, required minimum distributions, and long-term estate planning goals.
For some individuals, intentionally recognizing additional income in a particular year may support a broader long-term tax strategy.
Think Strategically About Charitable Giving
If charitable giving is already part of your financial plan, the way you give can matter.
Depending on your circumstances, strategies involving appreciated securities, donor advised funds, or qualified charitable distributions may be worth discussing.
Planning earlier in the year provides more time to coordinate charitable intentions with your investment and tax strategies rather than rushing to complete gifts in the final days of December.
Look Beyond This Year’s Tax Bill
Effective tax planning is not simply about paying the least amount of tax this year.
Sometimes a decision that increases taxes today could potentially improve your financial position over the long term. Other times, accelerating or delaying income, deductions, or investment gains may make sense.
The goal is to understand how today’s decisions affect not only your 2026 tax return, but also your retirement income, investments, estate plan, and the wealth you ultimately intend to transfer.
Give Yourself Time to Plan
By December, some planning opportunities may already have passed or become difficult to implement.
Starting now gives you and your financial professionals time to review your projected income, evaluate your portfolio, coordinate with your tax professional, and determine which strategies are appropriate for your individual situation.
Your tax strategy should work alongside the rest of your financial plan, not separately from it.
A thoughtful review now can help you approach the final months of 2026 with a clearer picture of where you stand and what decisions may still need to be made.
Tax planning should be considered throughout the year, not just when it is time to file your return. If you are looking for a financial strategy that considers taxes alongside your investments, retirement income, and long-term goals, give us a call to learn more.
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This material is prepared by BCA Private Wealth for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation or any particular security, strategy, or investment product.
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