Many families take their first close look at a tax year in April, after most chances to change it have passed. The year-end tax planning strategies that shape your 2026 bill have a December 31 deadline, and several new federal rules take effect this year. These seven moves also affect one another, which is why your investment advisor and your accountant should be on the same team.
1. Start With a Year-End Tax Projection
Start with a projection of your 2026 return, since most of the moves below depend on which tax bracket your last dollar of income falls into. For married couples filing jointly, the 32% bracket begins above $403,550 of taxable income and the 35% bracket above $512,450, per the IRS. A fall projection shows how much room you have before the next bracket, so December decisions aren’t guesses.
2. Size a Roth Conversion Before December 31
Size a Roth conversion to use the room left in your current bracket, and finish it before year-end, since conversions count in the year they happen. A conversion moves pre-tax IRA money into a Roth IRA, where qualified withdrawals come out tax-free later. Many pre-retirees find the most room in the years between their last paycheck and the start of Social Security and required distributions. New Jersey households should also watch the state and local tax (SALT) deduction. Its 2026 cap of $40,400 shrinks by 30 cents for every dollar of modified adjusted gross income (MAGI) above $505,000, according to Thomson Reuters.
Hypothetical illustration: a Monmouth County couple has $505,000 of MAGI and $455,000 of taxable income, and they pay more than $40,400 a year in state and local taxes. A $50,000 conversion shrinks their SALT cap by $15,000, so $65,000 of new income becomes taxable and their federal bill rises by roughly $21,000. That’s about 42% of the amount converted, even though the highest bracket the conversion reaches is 35%. Conversion income also counts toward the Medicare premium surcharges set two years later, one more reason to spread conversions over a few years.
3. Turn a Required Distribution Into a Charitable Gift
If you’re 70½ or older and give to charity, you can send the gift straight from your IRA as a qualified charitable distribution (QCD) before year-end. Each IRA owner can give up to $111,000 this way in 2026, per IRS Notice 2025-67. It stays out of your adjusted gross income, and once required minimum distributions begin, the gift counts toward them. Those start at age 73 for most of today’s retirees and at age 75 for anyone born in 1960 or later.
4. Bunch Charitable Gifts Under the 2026 Rules
If you itemize, consider bunching two or three years of planned giving into 2026 through a donor-advised fund, a charitable account you fund now and recommend grants from over time. Starting this year, itemizers can deduct charitable gifts only above 0.5% of adjusted gross income (AGI), and households in the 37% bracket get a benefit worth 35 cents on the dollar, as the Tax Foundation explains. As an illustration, at $600,000 of AGI, the first $3,000 of giving each year produces no deduction, and bunching means clearing that floor once rather than every year.
5. Harvest Investment Losses Without Triggering a Wash Sale
Tax-loss harvesting, or selling investments in taxable accounts that are worth less than you paid, can offset gains you’ve already taken this year. Avoid buying the same or a substantially identical investment within 30 days before or after the sale, because the wash sale rule disallows the loss. New Jersey is stricter than the IRS: unused losses don’t carry forward to later years, according to the state’s NJ-1040 instructions.
6. Use the New Catch-Up Rules in Your Workplace Plan
If you’re still working, check that your 401(k) contributions will reach the 2026 limit by your last December paycheck, since missed contributions can’t be made up later. The IRS set that limit at $24,500, plus an $8,000 catch-up contribution at age 50 or older, or $11,250 for ages 60 through 63 if your plan allows. If your 2025 wages from that employer topped $150,000, your catch-up contributions must go in as Roth, and a plan without a Roth option can’t accept them, under federal catch-up rules. You pay tax on those dollars now, and qualified withdrawals come out tax-free later, which adds tax-free dollars alongside your pre-tax savings.
7. Use Annual Gifts and Check Your Beneficiary Designations
If helping children or grandchildren is part of your plan, make this year’s annual exclusion gifts before year-end. In 2026, you can give $19,000 per person without filing a gift tax return, and an unused allowance doesn’t carry over. The lifetime estate and gift exemption is $15 million per person, the IRS reports. If you give by check, ask the recipient to deposit it before December 31. While you’re thinking about who inherits what, confirm your beneficiary designations, since retirement accounts and life insurance pass to the people named on those forms, regardless of your will.
How to Coordinate These Moves Before Year-End
The 42% result in the Roth example only shows up when someone looks at the conversion and the tax return together. That’s why, at Zynergy Retirement Planning, a fee-only fiduciary firm in Red Bank, New Jersey, our in-house CPA team works alongside our planners. Would you rather know where your 2026 taxes stand now than find out in April? We’re here to help.
To schedule a meeting or learn more, call 732-784-2380 or schedule a free consultation with a retirement specialist through Zynergy’s website here.
Frequently Asked Questions
What is the deadline for a Roth conversion in 2026?
A Roth conversion must be completed by December 31, 2026, to count as 2026 income. Conversions get no April extension the way IRA contributions do, and custodians may need several business days to process the paperwork. Our Retirement GPS podcast episode on Roth conversions explains how to decide how much to convert.
How much can I give from my IRA to charity in 2026?
IRA owners age 70½ or older can give up to $111,000 each in 2026 through qualified charitable distributions. Keep two points in mind:
- The money must go directly from the IRA to an eligible charity, and donor-advised funds don’t count.
- Once required minimum distributions begin, the gift counts toward them.
See how QCDs fit into managing required minimum distributions.
Can New Jersey residents carry capital losses forward?
No. New Jersey lets you use capital losses to offset gains in the same year, but unused losses can’t be carried to future years, even though your federal return allows a carryforward. Learn more about what qualifies as capital gains.
Should my financial advisor and CPA coordinate year-end planning?
Yes. Most year-end moves change taxable income, so an investment decision can change the return your CPA prepares. At Zynergy Retirement Planning, our in-house CPA team works alongside our planners, and our tax management service includes tax preparation and ongoing CPA access.
