Filing Status and Dependents

Evaluate your filing status — especially if you’re newly married or supporting dependents. Joint filing may offer tax advantages, but in some cases, separate filing could reduce your liability. If multiple parties support a dependent, coordinate to ensure one person qualifies to claim them and unlock associated tax benefits.

Family Wealth Strategies

• Income Shifting: Consider transferring income-producing assets to family members in lower tax brackets. Be mindful of the kiddie tax, which applies to unearned income over $2,700 for certain minors.
• Gifting: Use the $19,000 annual gift tax exclusion to transfer appreciating assets tax-free.
• Education Credits: Maximize the American Opportunity and Lifetime Learning credits by timing tuition payments strategically.

Employee and Self-Employed Planning

• Delay billing or bonuses to defer income.
• Consider using installment sales to spread capital gains.
• Adjust withholding and pay Q4 estimates by January 15, 2026.
• Spend down FSA balances before year-end to avoid forfeiture.

Business Optimization

• Accelerate deductible expenses.
• Leverage Section 179 and bonus depreciation for equipment purchases.
• Maximize retirement plan contributions before December 31.

Investment Management

• Prioritize long-term capital gains.
• Offset gains with losses through tax loss harvesting.
• Consider selling low-gain assets to minimize taxable income.

Real Estate Moves

• Consider paying property taxes and January mortgage in December to deduct expenses early.
• If selling your primary residence, ensure you meet the 2-out-of-5-year rule to exclude up to $500,000 in gains if married filing jointly.
• Structure investment property sales as installment sales to defer taxes.

Retirement Contributions

• IRA limits: $7,000 (or $8,000 if age 50+).
• 401(k) limit: $23,500.
• Catch-up contributions for those 50 or older are changing in 2026 and must be made in a Roth 401(k) for earners who made more than $145,000 the prior calendar year, according to the SECURE Act 2.0.
• HSA limits: $4,300 individual, $8,550 family.
• Take required minimum distributions (RMDs) if age 73+. Taxpayers can also satisfy their RMD by making a qualified charitable distribution (QCD). The 2025 QCD limit is $108,000.

Charitable Giving

• Donate appreciated stock to avoid capital gains.
• Consider creating a donor-advised fund for immediate tax deduction, even if the funds are distributed to specific charities later.
• Use credit cards for year-end donations to ensure deductibility.
• Starting in 2026, non-itemizers can deduct up to $1,000 for single filers or $2,000 for married couples filing jointly in cash donations to charity.

Adoption and Medical Expenses

• Adoption credit: Up to $17,280 per child.
• Bunch medical expenses to exceed the 7.5% AGI threshold for itemization.