2026 Year-end tax planning

The final quarter of the year is a great time to review your tax planning. Many of these tax planning strategies need to be completed by the end of the year, or you could lose important deductions to lower your taxes for 2026. Here are some of the top planning items to consider before the end of the year.

1. Take advantage of 401(k) and other employer sponsored plans:

If you haven’t maxed out all employer contributions this would be a good time to be sure you hit the limit by the end of the year. Yes, your paycheck will be lower but if you have cash or a brokerage account, these dollars can be used to supplement living expenses for the last quarter. It will be worth the additional tax deduction. In some instances, we see one of the spouses not maximizing contributions but if cash flow is strong, it is ideal to maximize both spouse’s employer plans.

2. Harvesting tax loss:

This piece is handled by your portfolio team at OmniStar Financial Group. We monitor this throughout the year and will continue to do so this final quarter of 2026. This involves selling a position at a loss to lock in the tax benefits, even if we purchase the security 30 days later.

3. Roth conversions:

If income is lower this year compared to other years it could make sense to look at Roth IRA conversions. This involves moving money from an IRA to a Roth IRA and paying the tax today, giving you tax free growth and distributions in the future. This doesn’t always make sense but it’s always worth checking the box so this opportunity isn’t missed.

 4. Utilizing annual gifting limits:

The annual gifting limit for 2026 is $19,000 per recipient. This means you and your spouse could give $38,000 to anyone without using any of your lifetime gift exemption. In many cases, if larger gifts are desired, we will give the maximum amount in December and also give the maximum amount again in January.

 5. Charitable gifts:

If philanthropy is important to you the last quarter of the year can be a great time to give. By this time, we generally have an idea of what income will be for the year, so we have an idea of the amount of tax savings a gift will create. We will also look at your tax bracket and if you’re slightly above a bracket, we may want to give enough to push you into the lower bracket, so those dollars aren’t taxed at the higher rate.

These are a few of the year-end tax strategies to consider. It’s always helpful for us to talk with your CPA to coordinate strategies and be sure everyone is on the same page. If you have any questions or would like to walk through some of these year-end strategies please don’t hesitate to reach out to your team at OmniStar Financial Group.