Most people think about taxes in March or April, when it’s too late to change much. The window that actually shapes your bill is the last couple of months of the year. A few hours of planning in November and December can lower what you owe — or at least prevent surprises.
1. Boost your 401(k) contributions
Contributions to a workplace 401(k) or 403(b) must come out of paychecks by December 31. If you have room under the annual limit and can afford it, raising your contribution for the last few paychecks lowers this year’s taxable income (for traditional contributions). At minimum, make sure you’re getting the full employer match.
IRA and HSA contributions are more forgiving — you generally have until the tax filing deadline in April. See Roth vs. traditional IRA and the HSA triple tax advantage.
2. Harvest investment losses
In a taxable brokerage account, selling investments at a loss can offset gains you’ve realized this year, plus up to $3,000 of ordinary income. Unused losses carry forward. Avoid buying the same or a substantially identical investment within 30 days before or after the sale, or the wash-sale rule disallows the loss. More in capital gains tax explained.
3. Consider harvesting gains in a low-income year
If your income is unusually low this year, you might qualify for the 0% long-term capital gains rate. Selling and rebuying appreciated investments resets your cost basis higher at no tax cost. (The wash-sale rule doesn’t apply to gains.)
4. Plan your charitable giving
- Donate appreciated stock instead of cash if you itemize — you may avoid the capital gain and deduct the full market value.
- “Bunch” donations into one year to get over the standard deduction, possibly using a donor-advised fund. See standard vs. itemized deductions.
- Qualified charitable distributions (QCDs): if you’re 70½ or older, you can give directly from an IRA to charity, which can satisfy required minimum distributions without adding to taxable income.
- Check the new rules: recent federal tax law changed charitable deductions starting in 2026, including a limited deduction for some non-itemizers and a new floor for itemizers. Review current IRS guidance before you give.
Get written acknowledgments for gifts of $250 or more.
5. Take required minimum distributions
If you’re old enough to be subject to RMDs from traditional IRAs or 401(k)s, the deadline is generally December 31 (with a later deadline for your first one). Missing an RMD can trigger a steep excise tax, though it’s reduced if corrected promptly. The IRS has an RMD FAQ.
6. Use your FSA money
Flexible spending accounts are often use-it-or-lose-it, with limited carryover or grace periods. Check your balance and schedule eye exams, dental work, or stock up on eligible supplies.
7. Check your withholding and estimated payments
Use the IRS Tax Withholding Estimator to see if you’re on track. If you’re short, increasing withholding from your last paychecks counts as if paid evenly through the year. Freelancers should plan the January 15 payment — see estimated quarterly taxes.
8. Time business income and expenses
Self-employed people using cash accounting can sometimes buy needed equipment or supplies before year-end, or delay invoicing to January, to shift income between years. Don’t buy things you don’t need just for a deduction. Consider opening a Solo 401(k) before year-end if you want to make employee contributions for this year.
9. Consider a Roth conversion
Converting part of a traditional IRA to a Roth means paying tax now for tax-free growth later. It can be appealing in a lower-income year. Conversions must be completed by December 31 to count for this year, and they can’t be undone.
10. Get organized for filing season
Create a folder for tax documents, gather receipts, and note any life changes — marriage, a new child, a home purchase, a move. It’ll make April far easier.
Bottom line
Several of the best tax moves expire on December 31: workplace retirement contributions, loss harvesting, charitable gifts, RMDs, and Roth conversions. Pick the ones that apply to you and act before the holidays get busy. If your situation is complex, a tax professional can model the trade-offs.
General information only; not tax advice.
