Year-End Tax Moves for Investors: What to Do Before December 31, 2026

It’s hard to believe we’re already well into the second half of the year. With a busy fall and winter quickly approaching there are some key moves to take care of before December 31, 2026: harvest investment losses or gains, finish any Roth conversions and RMDs, and lock in your charitable gifts. Do these earlier if a trade needs to settle or a custodian needs to process paperwork, too.

Three things are different about year-end tax planning in 2026, and all of them favor people who act before December 31 rather than after. First, there’s a new floor on charitable deductions and a new cap on how much those deductions are worth. Second, there’s a new tightened alternative minimum tax (AMT) exemption that includes more high earners than it did previously. Third, there’s a new above-the-line deduction for non-itemizers.

Most year-end tax advice is a simple to-do list. We’ll take a step further and build out a calendar. Not all year-end tax moves have the same deadline. A few have to be cleared by the time the markets close for the holidays while others are due on December 31st. A few don’t have to be completed until the tax filing deadline in April. More than just knowing what to do, it helps to know the sequencing as well.

This guide covers investment and tax moves specifically. For the broader year-end checklist, including insurance, benefits, open enrollment, and credit, start with our end-of-year financial checklist and then return here for the rest.

#What’s different in 2026

• The 0.5% AGI charitable floor. Under the One Big Beautiful Bill Act (OBBBA), itemizers can only deduct charitable gifts above 0.5% of their adjusted gross income. This begins in the 2026 tax year. This means a chunk of your charitable contributions may no longer count. For example, if your adjusted gross income (AGI) is $400,000, the first $2,000 you give is effectively non-deductible. This changes the math on bunching and donor-advised funds.

• The 35% deduction cap. If you’re in the 37% bracket, the value of your itemized deductions, including charitable gifts, is capped at 35 cents on the dollar, not 37. This means a $1,000 gift is worth $350 in tax savings instead of $370. It’s a small gap per dollar, but it adds up fast for those giving five or six figures each year.

• A new deduction for non-itemizers. For the first time, people who take the standard deduction can also deduct up to $1,000 (single filers) or $2,000 (married filing jointly) in cash charitable contributions. If you don’t itemize, this is new money on the table, but it’s cash only. Donor-advised contributions don’t count.

• A tightened AMT exemption phaseout. For 2026, the AMT tax exemption starts phasing out at $500,000 of income for single filers and $1,000,000 for joint filers. This is down from $626,350 and $1,252,700 in 2025. It also phases out twice as fast at 50 cents per dollar instead of 25. This means in December if you’re exercising incentive stock options or realizing a large gain before year-end, the AMT hit is bigger than it was last year and it kicks in sooner. Before exercising a large batch of ISOs this December, run the numbers against the new thresholds, or have your tax preparer do it, since the AMT hit can be larger than it looks.

#The year-end tax calendar

As previously mentioned, not everything is due December 31st. Some moves need extra runway because a trade or paperwork has to be processed through a custodian. Other tax moves aren’t due until you file your return. Let’s have a look:

The distinction between items due on December 31st and those due on April 15th is easily confused, which is why having a year-end calendar as well as a checklist is crucial.

#What retirement account moves should you make before year-end?

Contribution limits increased for 2026. According to the IRS, the 401(k) elective deferral limit is now $24,500 with an $8,000 catch-up for those who are 50 years of age or older. Workers aged 60-63 get an even larger catch-up at $11,250. The IRA contribution limit also rose to $7,500, with a $1,100 catch-up for those aged 50 or over.

Check your year-to-date deferrals against however many payroll runs you have left in December. If you’re behind the limit and your plan allows it, you may be able to increase your contribution percentage for the final paycheck or two to close the gap. If your 401(k) plan permits after-tax contributions above the standard limit, sometimes called a mega backdoor Roth setup, year-end is the last chance to use that room for 2026.

If you’re 73 or older, confirm you’ve satisfied your RMD. The penalty for missing one is steep at 25% of the amount you should have withdrawn. That penalty is reduced to 10% if it’s corrected within two years. This is not a deadline you want to let slip.

Roth income limits have shifted, too. Per IRS Notice 2025-67, the Roth IRA phase-out range for 2026 is $153,000-$168,000 for single filers and $242,000-$252,000 for joint filers. If you’re near that range, it affects whether you can contribute directly or need to go the backdoor route – a nondeductible IRA contribution you convert to Roth.

For the full contribution-limit breakdown across account types, see our IRA vs. 401(k) guide.

#Taxable account moves: harvesting losses and gains

Tax-loss harvesting is the selling of investments at a loss to offset gains elsewhere in your portfolio, plus up to $3,000 of ordinary income per year, with any excess loss carried forward to future years. The math is straightforward but worth spelling out: if you’re in the 35% bracket and you harvest a $30,000 loss against $30,000 of short-term gains, you save $10,500 in federal tax, plus another $1,140 by avoiding the 3.8% net investment income tax (NIIT) on that amount.

The wash sale rule is where many folks get tripped up. If you sell a security at a loss, but then buy a “substantially identical” one within 30 days before or after the sale (a 61-day window total), the loss is disallowed for tax purposes and gets added to the cost basis of the new position instead. The rule applies across all your accounts, including your spouse’s and your IRA, not just the one where you sold.

Specific-lot identification matters at the moment of sale. If you own the same stock purchased at different times and prices, you can choose which lot to sell. You might pick the highest-cost lot to minimize the gains, or a specific lot to control the size of your loss. The default method most brokerages use is FIFO (first in, first out), which isn’t always what you want. You have to elect otherwise before the trade settles, not after.

Tax gain harvesting is the move almost nobody talks about, but could be worth doing if you qualify. If your taxable income falls below $49,450 (single filer) or $98,900 (joint filers) for 2026, long-term capital gains in that bracket are taxed at 0%. You can sell appreciated positions, realize the gain tax-free, and buy back in. This resets your cost basis higher, with no tax cost and no wash-sale violation as it only applies to losses. A joint filer with $85,000 of taxable income could realize up to $13,900 in long-term gains this way and owe nothing federal tax on it. A few dollars over $98,900 and the whole gain jumps from the 0% to the 15% bracket, so model this against your exact income before selling in Monarch or with a tax preparer.

#Tax-loss harvesting vs. tax-gain harvesting: which applies to you?

For more on how account type affects these investment decisions, see our guide to investment vehicles.

#Charitable giving under the new rules

The 0.5% AGI floor changes the arithmetic on every gift. Your floor amount (0.5% of AGI) is subtracted from your total giving before the deduction is calculated. At $400,000 of AGI, your floor is $2,000. If you give $5,000, you deduct $3,000, not the full $5,000. Fidelity Charitable notes that for someone in the 37% bracket, the deduction is further reduced by the 35% cap, meaning that same $3,000 deduction is worth $1,050, not the $1,110 it would have been worth under the old rules.

This is why bunching, or combining multiple years of giving into one, matters more now than it did in years prior. Giving $15,000 in one year instead of $5,000 across three years clears the floor by a wider margin and concentrates the deduction in a year where it counts. A donor-advised fund (DAF) lets you take the deduction in the bunching year while distributing the money to charities over time. Greenberg Traurig’s analysis of the new rule also notes the order in which the floor applies across different types of contributions. Cash, stock, and DAF gifts are treated in a specific sequence, so the order in which you give can change your outcome. The floor eats into the stock deduction first, before it touches cash gifts.

Donating appreciated stock instead of cash still pulls double duty. You avoid capital gains tax on the appreciation, and you can deduct the fair market value (subject to the same floor and cap). It’s generally the more efficient way to give if you’re holding a position with a large unrealized gain.

Qualified charitable distributions (QCDs) are an exception worth understanding. According to Fidelity, the 2026 QCD limit is $111,000 per individual, or $222,000 for a married couple with separate IRAs. This is up from $108,000 in 2025. A QCD sends money directly from your IRA to a qualified charity, counts toward your RMD, and bypasses both the 0.5% floor and the 35% cap entirely because it’s excluded from income in the first place, not deducted after the fact. For anyone subject to RMDs and is charitably inclined, this is usually the most efficient way to give.

If you don’t itemize, remember the new non-itemizer deduction is up to $1,000 single filers or $2,000 joint filers, but cash gifts only. DAF contributions don’t qualify.

If you’re also thinking about gifting to family rather than to charity, the annual gift tax exclusion is $19,000 per recipient for 2026. Front-loading five years of 529 contributions at once (superfunding) is also a common December move for grandparents and parents alike. For more on 529 plans and funding them check out our guide.

#Roth conversions and bracket management

A Roth conversion moves money from a traditional IRA to a Roth IRA, and you pay ordinary income tax on the amount converted now in exchange for tax-free growth and withdrawals later. The move is irreversible. The ability to undo a conversion, called recharacterization, was eliminated in 2018.

The standard approach is to size the conversion to “fill” your current bracket without spilling into the next one. For 2026, the 22% bracket for joint filers tops out at $211,400 of taxable income. If your income for the year lands at $180,000, you have roughly $31,400 of room to convert before you’d start paying 24% on the next dollar.

Two things to check before converting:

• The IRMAA lag. Medicare premiums are based on your tax return from two years prior. A large conversion this year could raise your Medicare premiums starting in 2028, not 2026. It’s easy to miss because the consequence shows up so much later.
• The AMT phaseout. With the exemption phaseout now starting at $500,000 for single filers and $1,000,000 for joint and moving twice as fast, a conversion that pushes your income into that range costs more in AMT exposure than it would have last year.

For how a conversion may fit into your broader retirement plan, read through our retirement planning guide.

#If you’re married, coordinate

Nearly every piece of year-end tax advice is written with one single filer in mind. So if you’re married, it’s critical to understand your decisions are based on two people’s income and circumstances.

• Whose losses offset whose gains. If one spouse has realized losses in a brokerage account and the other has realized gains, those net against each other on a joint return regardless of which account they happened in. Don’t harvest losses in one account without checking what’s happening in another.
  
• Bunching charitable gifts across both filers. The 0.5% floor is calculated on joint AGI, not per spouse. Combining a year of giving from both partners into one tax year clears that floor more efficiently than each person giving separately in different years.
  
• A single joint AGI target. NIIT, Roth eligibility, and IRMAA are all based on joint AGI once you’re married and filing jointly. A Roth conversion or a large gain realized by one spouse can push both partners past a threshold of which neither would have hit alone.
  
• Equity comp timing. If both partners have RSU vests or ISO exercises scheduled in the same window, the combined income can trigger AMT exposure or bracket creep that neither position would cause on its own. Look at both vesting schedules together before year-end, not separately.

#Moves that look smart but might not be

A few December moves that sound reasonable but may cost you money include:

• Harvesting losses inside an IRA or 401(k). There’s no taxable gain to offset inside a tax-advantaged account, so there’s no tax benefit to realizing a loss there. Harvesting only matters in taxable accounts.
• Buying back within 30 days. Repurchasing the same or a substantially identical security within the 61-day wash sale window disallows the loss you were trying to claim.
• Converting to a Roth with no cash to pay the tax. If you cover the conversion tax by withholding from the converted amount itself, you’re reducing what actually lands in the Roth. If you’re under 59 ½ the withheld portion can trigger a 10% early withdrawal penalty on top of it.
• A December gift that falls entirely under the 0.5% floor. A small, one-off gift that doesn’t clear your AGI floor produces zero deduction. If you’re going to give, giving enough to clear the floor, or bunching, is what makes it count on your tax return.

#How Monarch helps

Every move described here depends on the same thing: knowing your actual full-year income and your realized gains to date, across all of your accounts. That’s the hardest input to assemble, and it’s a big reason most people skip year-end tax planning entirely. A brokerage statement shows you just that one custodian. Monarch shows you all of it, in one place, updated automatically.

Monarch’s investments view surfaces which positions are actually sitting at a loss and where concentration has built up. This is the raw data needed to decide what to harvest and what to hold. Because Monarch is built for households, both partners see the same complete picture, which is what makes coordination possible from offsetting gains, to bunching gifts, to hitting a joint AGI target. Before you execute a Roth conversion, you can model it against your actual numbers to see whether it pushes you into the next bracket or over an IRMAA threshold, rather than finding out afterwards in April.

When December is done, the work isn’t over, it just changes shape. Our tax documents checklist covers what to gather and organize between now and filing season.

Work Backward From December 31st

You don’t need to make every move in this guide. You only need to focus on the ones that apply to you, in the right order, and before the deadlines that govern them. Start with the calendar above, check which moves need to be cleared before the holidays, and work backward from there. December 31st arrives faster than we anticipate.

#FAQs

What is the deadline for year-end tax moves?
Most of the moves that matter, including Roth conversions, RMDs, QCDs, charitable gifts, tax-loss harvesting trades, and final 401(k) deferrals, must be completed by December 31st. IRA and HSA contributions for the year have until April 15, 2027.

Can I still do a Roth conversion in December?
Yes, as long as the conversion is completed by December 31st. Give yourself a few extra business days before the deadline in case your custodian needs time to process it, especially during the holiday week.

How much can tax-loss harvesting actually save me?
It depends on your bracket and the size of the loss. As an example, a $30,000 realized loss offsetting $30,000 of short-term gains saves someone in the 35% bracket about $10,500 in federal tax, plus roughly $1,140 by avoiding the 3.8% net investment income tax on that amount.

What is the wash sale rule and how do I avoid breaking it?
Under IRC 1091, if you sell a security at a loss and buy a substantially identical one within 30 days before or after the sale, the loss is disallowed. Avoid it by waiting at least 31 days to repurchase, or by buying a similar but not identical replacement in the meantime.

Should I sell winners or losers before year-end?
It depends on your taxable income. If you have gains to offset or ordinary income to reduce, harvest your losses. If your taxable income falls near or below $49,450 (single) or $98,900 (joint) for 2026, you may be able to harvest gains tax-free inside the 0% long-term capital gains bracket instead.

What changed for charitable deductions in 2026?
Itemizers can now only deduct gifts above 0.5% of their AGI, and the value of itemized deductions is capped at 35 cents on the dollar for those in the 37% bracket. Non-itemizers, for the first time, can deduct up to $1,000 (single) or $2,000 (joint) in cash gifts as well.

Is it too late to max out my 401(k) for 2026?
No, but only if you have more payroll runs left in the year. Check your year-to-date deferrals against the contribution limits and see whether you have enough pay periods left to close the gap.