Maximize your retirement savings before December 31, 2026. The 2026 workplace contribution cap for 401(k), 403(b), and similar plans is $24,500. Workers 50 and older can add an extra $8,000 catch-up contribution for a total of $32,500. Under SECURE 2.0, workers aged 60 to 63 may contribute an extra $11,250, raising their maximum to $35,750. If you earned $150,000 or more in FICA wages in 2025, your catch-up contributions must be made on a Roth basis with after-tax dollars, though future withdrawals in retirement will be tax-free. You have until April 2027 to contribute to a traditional or Roth IRA. The 2026 IRA limit is $7,500, plus $1,100 in catch-up contributions for those 50 and older.
Spend or manage your flexible spending account (FSA) funds by December 31 or check your plan documents. Your employer offers one of two options: a 2.5-month grace period (typically until March 15, 2027) to spend remaining funds, or permission to carry over up to $680 into 2027. Health savings accounts (HSAs) operate differently. They have no use-it-or-lose-it rule, allowing unspent balances to roll over indefinitely tax-free. The 2026 HSA contribution limit is $4,400 for self-only coverage or $8,750 for family coverage, plus an extra $1,000 for those 55 or older. You can make 2026 HSA contributions until April 15, 2027.
If you are required to take required minimum distributions (RMDs) from traditional IRAs, 401(k)s, or 403(b)s, meet the December 31 deadline. The starting age for RMDs in 2026 remains 73. Missing this deadline triggers a 25% penalty on the undistributed amount, or 10% if you correct it within two years. Those turning 73 this year can defer the first RMD until April 1, 2027, but this forces two distributions in 2027, which could increase your federal tax bracket and trigger Medicare premium surcharges. Consider a qualified charitable distribution (QCD) to satisfy your RMD without inflating taxable income. Taxpayers 70 and a half or older can transfer money directly from a traditional IRA to a qualified charity tax-free. For 2026, you can donate up to $111,000 per person or $222,000 for married couples filing jointly with separate IRAs. Complete your QCD before taking any cash payouts to maximize how much offsets your RMD.
Rebalance your investment portfolio before year-end if your stock and bond mix has shifted from your target allocation. If selling winners creates a capital gain in a taxable brokerage account, offset it by harvesting losses from underperforming assets to potentially lower your tax bill. You can deduct up to $3,000 of excess losses to offset ordinary income ($1,500 if married filing separately). Losses exceeding that amount can be carried forward indefinitely into future years. Watch for the IRS wash-sale rule, which prohibits claiming a loss if you buy the same or substantially identical security within 30 days before or after the sale.
Adjust your federal tax withholding before December 31 if you experienced an income spike from bonuses, capital gains, or taxable distributions. Use the IRS Tax Withholding Estimator to determine whether you need changes. Your federal tax payments for the year should equal at least 90% of your 2026 tax liability or 100% of your 2025 tax bill (110% if last year's adjusted gross income exceeded $150,000, or $75,000 if married filing separately). If too little has been withheld, ask your employer to boost W-2 withholding on your final December paycheck or instruct your IRA custodian to withhold tax from a year-end distribution.
Lower your 2026 taxable income before year-end to unlock tax breaks. The 2025 Trump tax bill introduced a "senior bonus" deduction up to $6,000 for eligible filers 65 and older and a deduction on car loan interest up to $10,000 for qualifying vehicles. The senior bonus deduction phases out at $75,000 in modified adjusted gross income (MAGI) for single filers or $150,000 for joint filers. Boosting pre-tax 401(k) contributions or harvesting capital losses can lower your MAGI below these thresholds. If you claim the standard deduction, you're eligible for a new charitable deduction for non-itemizers of up to $1,000 in direct cash gifts to qualified public charities ($2,000 for married couples filing jointly). Itemizers can use a "bunching" strategy to make multiple years' worth of charitable gifts to a donor-advised fund before December 31 to help reach the deduction threshold to itemize.