Written by: Pam Louden
By the time November rolls around, most people are focused on finishing the year strong. From a tax standpoint, this stretch of the calendar is also one of the most valuable planning windows you have.
The reason is simple: once December 31 passes, many of the moves that can meaningfully reduce your tax bill for 2026 are off the table. We’ve seen that individuals who have the smoothest tax seasons are rarely the ones with the simplest finances; they’re the ones who took a little time in November or early December to make a few smart decisions while they still had options.
Below are several year-end strategies we commonly review. Not all will apply to everyone, but even one or two can make a noticeable difference.
Start With a Quick Tax Projection (Don’t Guess)
Before making any year-end moves, it helps to know what you’re aiming for. A quick tax projection can clarify whether you’re trending toward a refund or a balance due, and whether your income is meaningfully higher or lower than last year. If your income includes bonuses, investment activity, business profits, or other irregular items, updated year-to-date numbers make it easier to decide which actions will actually help.
Review Your Withholding and Estimated Tax Payments
One of the most common year-end surprises we see is underpayment. Many people do everything “right,” but their income ends up higher than expected because of a strong business year, a large bonus, a job change, or capital gains. If you’re behind, a late estimated payment may not fully avoid penalties, because it only counts from the date it’s made. Increasing withholding late in the year can work better, since withholding is treated as paid evenly throughout the year. This step alone can prevent a lot of frustration in April.
Consider Timing: Income and Expenses Still Matter
For business owners in particular, year-end is often the last chance to use timing strategically. In the right situation, it may make sense to accelerate certain expenses into 2026 or postpone income into early 2027. The goal isn’t to make artificial moves just for tax reasons; it’s to align the timing of real business decisions in a way that supports cash flow and lowers overall tax friction. When those two things line up, timing can be one of the cleanest planning tools available.
Maximize Retirement Contributions: One of the Easiest Wins
Retirement contributions remain one of the most straightforward ways to reduce taxable income. Even if you contribute consistently, year-end is a good time to confirm you’re on pace to maximize what you’re eligible to put away, whether through a workplace plan or individual retirement accounts. For business owners and self-employed individuals, there may be additional planning opportunities depending on business structure and plan design. In many cases, thoughtful retirement funding provides both a tax benefit today and long-term personal financial security.
Use Charitable Giving Strategically, Not Just Generously
Charitable giving is often a natural part of year-end, and for many it’s driven by values and community involvement. If you’re going to give anyway, it’s worth making sure you’re doing it in a way that supports your overall tax strategy. That matters even more this year, because 2026 is the first year of new charitable deduction rules.
If you don’t itemize, there’s good news: a new above-the-line deduction for charitable contributions is capped at $1,000 per year for individuals and $2,000 for married couples filing jointly. If you do itemize, you can now deduct charitable contributions only to the extent they exceed 0.5% of your adjusted gross income (AGI). With $300,000 of AGI, for example, the first $1,500 you give isn’t deductible.
For higher-income households, the “how” can matter as much as the “how much.” Bunching several years of gifts into one year, often through a donor-advised fund, can help you clear the floor and get more value from itemizing. Keep in mind that DAF contributions don’t qualify for the new non-itemizer deduction. Giving appreciated stock instead of cash can avoid capital gains tax on the growth. If you’re 70½ or older, qualified charitable distributions from your IRA are especially attractive, since they bypass the 0.5% floor.
Just as importantly, year-end is the time to make sure donations are properly documented so there’s no scramble later.
Review Capital Gains and Investment Activity
Investments have a way of changing a tax return quietly, especially in years with strong markets or major portfolio adjustments. If you’ve sold investments in 2026 or plan to before year-end, it’s worth reviewing what gains or losses have already been realized. In some cases, tax-loss harvesting may help offset gains, and in others, it’s simply about understanding where the tax exposure is coming from so there are no surprises. This is especially important for higher earners who may be subject to additional taxes tied to investment income.
Don’t Miss Key Business Credits and Deductions
In November, there’s still time to catch items that can easily be missed if the year gets away from you. That could include documenting equipment purchases, making sure vehicle usage is being tracked appropriately, reviewing eligibility for tax credits, or cleaning up bookkeeping so your year-end reporting is accurate. Even when there isn’t a dramatic “tax strategy,” getting the fundamentals right often leads to better outcomes and a smoother return preparation process.
If You Own a Business, Don’t Ignore Entity and Compensation Planning
For owners of S corporations, partnerships, and closely held businesses, year-end is often the right time to revisit owner compensation, distributions, and overall taxable income strategy. These decisions can affect not only what you pay in taxes, but also what your financial statements look like and how much flexibility you carry into the next year. It’s an area where proactive planning tends to create long-term benefits, especially for growing businesses or those thinking ahead to a future transition.
The Best Year-End Tax Plan Is the One That’s Simple and Done Early
Tax planning doesn’t need to be complicated to be effective. The best results usually come from a handful of smart, practical adjustments made early enough to implement cleanly.
If you want to reduce your 2026 tax bill, the worst time to talk about it is in March, because by then you’re stuck with what happened. Individual returns aren’t due until April 15, 2027, but most of the decisions that shape them close on December 31. The best time is right now, while you still have time to make choices. Contact Burke CPA’s and Advisors to schedule a year-end review.