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To lower your 2026 tax bill, the highest-impact moves before December 31 are maxing your 401(k) and HSA, harvesting investment losses, and bunching deductible expenses or charitable gifts. After year end, your only real option left is an IRA contribution before the April 2027 deadline; everything else must be done by December 31. Here are the ten moves that matter most for most people.
Key Takeaways
- Most moves expire December 31, so act before year end; only IRA contributions stretch to April.
- Max tax-advantaged accounts first: 401(k) up to $24,500 and HSA up to $4,400 (self-only).
- Harvest losses and bunch deductions to offset gains and clear the standard deduction.
- Time Roth conversions and FSA spending before the December 31 cutoff.
Max Out Your 401(k)
The 2026 401(k) limit is $24,500 ($32,500 if you are 50+, and up to $35,750 for ages 60 to 63 under the higher catch-up). Every dollar you contribute to a traditional 401(k) cuts your taxable income by a dollar, so maxing the $24,500 at a 22% marginal rate saves about $5,390 in federal tax. Check your year-to-date total, divide the remaining limit by your paychecks left, and raise your contribution percentage to catch up. Note: starting in 2026, high earners (over $150,000 prior-year wages) must make catch-up contributions as Roth.
Contribute to Your HSA
The 2026 HSA limit is $4,400 for individuals and $8,750 for families. HSA money is pre-tax, grows tax-free, and comes out tax-free for medical costs, the only account with that triple advantage. If you have an HSA-eligible high-deductible plan and have not maxed out, contributing before year end lowers your 2026 taxable income. Unlike IRAs, your 2026 HSA contributions must be in by December 31, 2026, not April, so do not miss it. See our guide on choosing the right health plan.
Harvest Tax Losses in Your Brokerage
Tax-loss harvesting means selling investments that have dropped to realize a capital loss, which offsets capital gains plus up to $3,000 of ordinary income. If you hold positions at a loss in a taxable account, selling before December 31 captures the benefit this year. You can immediately reinvest in a similar but not identical fund to keep your exposure without triggering the wash-sale rule, for example selling VOO at a loss and buying IVV the same day to keep S&P 500 exposure. Wait 31 days before buying back the original fund.
Accelerate Deductible Expenses Into 2026
If you are close to itemizing (above the 2026 standard deduction of $16,100 single or $32,200 married filing jointly), pulling deductible expenses into 2026 can push you over the threshold. Expenses you can accelerate include paying your January 1 mortgage payment in December, making planned 2027 charitable gifts now, paying Q4 state estimated taxes before December 31, and scheduling elective medical procedures if you are near the 7.5%-of-AGI medical threshold.
Make Charitable Donations Strategically
Cash gifts to qualifying charities are deductible if you itemize, but two strategies stretch the value further:
Donate appreciated stock instead of cash. Giving stock that has gained directly to a charity lets you deduct the full fair market value while avoiding capital gains tax on the gain. On $5,000 of stock with a $2,000 basis, you skip about $450 in capital gains tax (15% rate) and still deduct the full $5,000.
Bunch gifts into a Donor Advised Fund. If you usually give $3,000 a year, bunching 3 to 5 years ($9,000 to $15,000) into a DAF in one year can clear the itemization threshold, and the fund grants to charities over time while you take the full deduction now.
Note: the OBBBA added a 0.5%-of-AGI floor before charitable gifts are deductible for itemizers, so on a $100,000 AGI the first $500 of giving is not deductible. Most donors giving over $1,000 are barely affected. See our guide on OBBBA tax changes.
Convert a Traditional IRA to Roth (If the Timing Fits)
A Roth conversion moves money from a tax-deferred traditional IRA into a tax-free Roth, triggering ordinary income tax on the converted amount now. It makes sense in unusually low-income years (job loss, career transition, early retirement, big deductions) that put you in a lower bracket than you expect at retirement. If you expect higher taxes later, converting now pays off; if you expect lower taxes in retirement, keep the traditional IRA. Conversions must be done by December 31 to count for 2026, with no April extension.
Use Your FSA Before It Expires
Healthcare FSA funds are use-it-or-lose-it. If your plan has a December 31 deadline with no grace period or rollover, spend the balance before year end on prescriptions, dental, vision (glasses, contacts, exams), medical equipment, and over-the-counter items. Check your balance in October and book any needed appointments for November and December so you use the funds deliberately.
Make a 529 Contribution
529 contributions are not federally deductible, but most states offer a state income tax deduction or credit. If your state offers one and you have education costs ahead, a year-end 529 contribution lowers your state taxable income for 2026. Some states require contributions by December 31; others allow them until the April filing deadline, so check your state’s rule.
Review Your Withholding
If you had a major change in 2026 (marriage, divorce, new child, side income, big investment gains), your withholding may be off. Use the IRS Tax Withholding Estimator at irs.gov to check. Significant over-withholding is an interest-free loan to the government, while under-withholding can mean a penalty plus a big April bill. Submit an updated W-4 now so corrections hit your final 2026 paychecks. See our guide on estimated taxes.
Maximize Your Dependent Care FSA
The 2026 Dependent Care FSA limit rose to $7,500 under the OBBBA. If you have childcare costs but did not elect the full amount at open enrollment, you generally cannot add more mid-year without a qualifying event. But a new child or a change in childcare arrangement may open a window to increase your election, so contact HR right away if that applies to you.
FAQ
What is the deadline to lower my 2026 taxes?
December 31, 2026 for almost everything: 401(k), HSA, FSA, tax-loss harvesting, Roth conversions, and charitable gifts. The main exception is an IRA contribution, which you can make until the April 2027 filing deadline.
What is the 2026 401(k) and HSA limit?
The 401(k) limit is $24,500 ($32,500 at 50+), and the HSA limit is $4,400 for individuals and $8,750 for families. Maxing these is the highest-impact way to cut taxable income.
Is it better to donate cash or stock?
Donating appreciated stock is usually better, because you deduct the full market value and avoid capital gains tax on the gain. Bunching gifts into a Donor Advised Fund can also help you clear the itemization threshold.
Can I still lower my taxes after December 31?
Mostly no. The main move left is contributing to a traditional IRA before the April 2027 deadline. Everything else, including 401(k), HSA, and Roth conversions, must be done by December 31.
Bottom Line
Most tax-saving moves close on December 31, so max your 401(k) and HSA, harvest losses, and bunch deductions or charitable gifts before year end. Time your Roth conversions and FSA spending now, review your withholding, and leave only the IRA contribution for the spring. To go deeper, see our guides on OBBBA tax changes, choosing a health plan, and estimated taxes.
This article is for educational and informational purposes only and is not tax advice. Tax strategies vary by individual situation, so consult a tax professional before making year-end moves, and confirm current figures at irs.gov.
