The 2026 Year-End Financial Checklist: 10 Moves Before December 31
The 2026 Year-End Financial Checklist: 10 Moves Before December 31
As the calendar year draws to a close, a few strategic moves can significantly impact your taxes, retirement readiness, and long-term financial health. Completing these steps before December 31, 2026, could help you take advantage of current contribution limits, avoid penalties, and start the New Year on solid footing.
This checklist is general in nature for you to consider. Individual situations vary, and tax laws can change. Consult your financial advisor or tax professional before acting.
1. Maximize Retirement Account Contributions
For 2026, the employee elective deferral limit for 401(k), 403(b), and similar plans is $24,500. Those age 50 and older can contribute an additional $8,000 catch-up (total $32,500). Participants ages 60–63 may use a higher “super” catch-up of $11,250 (total $35,750). IRA contribution limits are $7,500, plus $1,100 for those 50 and older (total $8,600). Check your year-to-date contributions and adjust payroll deferrals if possible before year-end. Source: IRS Notice 2025-67.
2. Take Required Minimum Distributions (RMDs) if Applicable
If you are age 73 or older (or reach the applicable age in 2026), you generally must take RMDs from traditional IRAs and certain workplace plans by December 31. Those taking their first RMD can delay until April 1 of the following year, but this often results in two distributions in one calendar year. Failure to take the full RMD can trigger a significant penalty. Source: IRS rules under SECURE 2.0.
3. Consider Roth Conversions
Converting traditional IRA or 401(k) assets to a Roth IRA creates taxable income in the year of conversion but allows future tax-free growth. Year-end is a natural time to evaluate whether a partial conversion fits your tax bracket.
4. Review Tax-Loss Harvesting Opportunities
Selling investments at a loss can offset capital gains and, in some cases, up to $3,000 of ordinary income. Be mindful of the wash-sale rule, which disallows the loss if you repurchase a substantially identical security within 30 days.
5. Make Annual Exclusion Gifts
The annual gift tax exclusion for 2026 is $19,000 per recipient. You can give this amount to as many people as you wish without using any of your lifetime exemption or filing a gift tax return. Married couples can effectively double the amount through gift-splitting. Source: IRS Rev. Proc. 2025-32.
6. Evaluate Charitable Giving Strategies
Consider qualified charitable distributions (QCDs) from an IRA if you are age 70½ or older—these can satisfy all or part of an RMD while excluding the amount from taxable income. Donor-advised funds or bunching gifts may also be advantageous depending on your itemizing situation.
7. Fund Health Savings Accounts (HSAs)
2026 HSA limits are $4,400 for self-only coverage and $8,750 for family coverage, plus $1,000 if you are 55 or older. HSAs offer triple tax advantages when used for qualified medical expenses. Source: IRS Rev. Proc. 2025-19.
8. Review Beneficiaries and Estate Documents
Confirm that primary and contingent beneficiaries on retirement accounts, life insurance, and other assets are current. Also review wills, trusts, powers of attorney, and healthcare directives.
9. Check Estimated Tax Payments and Withholding
Ensure you have paid enough through withholding or estimated payments to avoid underpayment penalties. Year-end is a good time to project your total tax liability.
10. Rebalance Your Investment Portfolio
Market movements can cause your asset allocation to drift. Rebalancing inside tax-advantaged accounts is often simplest and can help maintain your risk profile heading into the New Year.
Completing these steps does not require perfection—focus on the items with the largest potential impact for your situation. Your advisor can help prioritize and implement them efficiently.
Disclaimer: This article is for educational purposes only and does not constitute tax, legal, or investment advice. Always consult qualified professionals regarding your specific circumstances.