Year-End Tax Planning: What to Do Before December 31

2 days ago

3 min read

Most people think about taxes in March and April. But many of the decisions that shape your tax bill have to be made before December 31. Once the calendar turns, a lot of opportunities close for the year.

The good news is that year-end planning does not have to be complicated. A few simple steps now can help you reduce your tax bill, avoid surprises, and make tax season much less stressful. Here is what to review before the year wraps up.

For Individuals and Families

A quick review of your year can reveal savings you might otherwise miss.

Boost your retirement contributions. Contributions to an employer plan like a 401(k) generally need to be made by December 31 to count for this year. You can typically still make IRA contributions up until the tax filing deadline.
Check your withholding. If you changed jobs, picked up a side gig, or had a big life change this year, your withholding may be off. Adjusting it now can help you avoid an unexpected bill in April.
Account for life changes. Getting married, having a baby, buying a home, or sending a child to college can all affect your return. Knowing how these changes apply before you file helps you plan ahead.
Review the new senior deduction. If you or your spouse are 65 or older, you may qualify for an additional deduction available through 2028. It is worth factoring in when you estimate what you owe.

New for 2026: Charitable Giving Counts Even If You Don't Itemize

This is one of the most helpful changes for everyday taxpayers. Starting with 2026, people who take the standard deduction may be able to deduct up to $1,000 in cash donations to qualifying charities, or up to $2,000 for married couples filing jointly.

Donations must be made by December 31 to count for 2026.
Gifts must go to an eligible charity. Donations to donor-advised funds generally do not qualify.
Keep your receipts, canceled checks, or bank records to support the deduction when you file.

If you already give during the holidays, this is a simple way to make that generosity go a little further.

For Small Business Owners

The end of the year is one of the best times to get a clear picture of where your business stands.

Get your books up to date. Reconciling your accounts now makes it much easier to spot deductions, catch errors, and prepare an accurate return.
Plan major purchases. Equipment, vehicles, or technology your business needs may be deductible this year if they are purchased and put into service by December 31.
Stay on top of estimated taxes. If you make quarterly payments, the final payment for 2026 is due January 15, 2027. Reviewing your income now helps you avoid underpayment penalties.
Prepare for W-2s and 1099s. Confirm you have current W-9 forms on file for contractors and accurate payroll records for employees. These forms are due to recipients by January 31.

Let's Finish the Year Strong

Year-end planning works best with a little guidance. Our team has more than 35 years of experience helping individuals, families, and small businesses across Tennessee plan ahead and keep more of what they earn. We're here year-round, and our Mt. Juliet office is always open to you.

Schedule your year-end review today. Give us a call at (615) 773-2736.

FAQs

1. Is it too late to make changes that affect my 2026 taxes? Not at all. Many steps, like retirement contributions, charitable donations, and business purchases, can still count for 2026 as long as they are completed by December 31.

2. Do I need to itemize to deduct charitable donations? Not anymore. Starting in 2026, people who take the standard deduction may deduct up to $1,000 in qualifying cash donations, or $2,000 for married couples filing jointly.

3. Did anything change for people who do itemize their donations? Yes. Starting in 2026, itemizers can only deduct charitable contributions above 0.5% of their adjusted gross income. If you give regularly, it may be worth reviewing how and when you donate.

4. When is the last estimated tax payment for 2026 due? The fourth quarter payment is due January 15, 2027. If you are self-employed or have income without withholding, check your numbers before then.

5. When should I schedule a year-end tax review? The earlier, the better. Meeting in November or early December gives you time to act on any opportunities before the year ends.

Learn more at IRS.gov.