As 2026 comes to a close, now is the time to review your income, deductions, estimated tax payments, retirement contributions and business records. Waiting until tax season may limit the planning strategies still available to you.

Here are several important year-end tax planning steps to consider.

1. Review Your Income and Estimated Tax Payments

Compare your 2026 income with the federal and state taxes already paid through withholding or estimated payments. This is especially important if you:

• Are self-employed

• Own a business

• Receive rental income

• Sold investments or real estate

• Earned income from multiple jobs

• Received a large bonus

• Had significant changes in income

The IRS recommends using your expected income, deductions and credits to calculate estimated tax obligations. Reviewing these figures before year-end may help reduce underpayment penalties and prevent an unexpected tax bill.

2. Maximize Retirement Contributions

Retirement contributions may help build long-term financial security while potentially reducing taxable income.

For 2026, the employee contribution limit for most 401(k), 403(b) and governmental 457 plans is $24,500. The combined traditional and Roth IRA contribution limit is $7,500, or $8,600 for eligible individuals age 50 or older. Eligibility and deductibility depend on income, filing status and participation in an employer-sponsored plan.

Business owners should also review whether a SEP IRA, SIMPLE IRA, Solo 401(k) or another retirement plan fits their situation.

3. Organize Business Income and Expenses

Small-business owners should reconcile their bookkeeping records before December 31. Review:

• Bank and credit-card accounts

• Customer invoices and unpaid receivables

• Vendor bills

• Payroll records

• Sales-tax filings

• Business loans

• Owner contributions and withdrawals

• Fixed assets and depreciation schedules

• Vehicle and mileage records

• Contractor payments that may require Form 1099

Well-organized records help support the income, deductions and credits reported on a tax return. The IRS generally requires taxpayers to retain documentation for as long as it may be relevant under the applicable limitation period.

4. Review Business Purchases

If your business needs equipment, computers, furniture, machinery or vehicles, discuss the timing of those purchases with a tax professional.

Purchasing an asset alone may not be sufficient. Depending on the applicable tax provision, the asset may need to be placed in service before year-end to qualify for a 2026 deduction. Financing terms, business-use percentage, depreciation recapture and future cash flow should also be considered.

Do not make a large purchase solely for a tax deduction. The purchase should make financial and operational sense for the business.

5. Evaluate Itemized Deductions

Review whether your allowable itemized deductions may exceed the standard deduction. Potential items can include qualifying:

• Mortgage interest

• State and local taxes

• Charitable contributions

• Medical expenses

• Casualty losses under limited circumstances

For tax year 2026, the federal standard deduction is $32,200 for married couples filing jointly, $16,100 for single filers and married individuals filing separately, and $24,150 for heads of household.

Documentation and applicable limitations remain important.

6. Review Capital Gains and Losses

Investors should review realized and unrealized gains and losses before year-end. In some situations, realizing a capital loss may help offset taxable capital gains.

However, investment decisions should consider long-term financial goals, market conditions and the wash-sale rules—not taxes alone.

7. Consider Charitable Giving

If you plan to make charitable contributions, complete eligible donations by December 31 and retain proper acknowledgment from the qualified organization.

The tax benefit depends on whether you itemize deductions and whether the contribution satisfies applicable substantiation requirements.

8. Check Payroll and Business Compliance

Business owners should confirm that:

• Payroll filings are current

• Employee and contractor classifications are correct

• Reasonable compensation has been reviewed for S corporation shareholders

• Sales-tax returns are filed

• Business registrations and licenses remain active

• Forms W-2 and 1099 can be prepared accurately

• Personal and business transactions are properly separated

Correcting these matters before tax season can prevent delays, penalties and amended filings.