Individual Year-End Tax Planning Checklist

What’s New for 2026

Recent federal tax law changes may affect your year-end planning. Highlights for individuals:

• Higher standard deduction for 2026: $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
• Charitable gifts without itemizing: beginning in 2026, individuals who do not itemize may deduct up to $1,000 of cash gifts to eligible charities ($2,000 married filing jointly). Gifts of noncash items and donor-advised funds do not qualify.
• Charitable minimum for itemizers (beginning 2026): if you itemize, charitable gifts are deductible only to the extent they exceed 0.5% of your adjusted gross income. For example, with $200,000 of adjusted gross income, the first $1,000 of gifts produces no deduction.
• Additional deduction for seniors (2025–2028): up to $6,000 per person age 65 or older, reduced above $75,000 of modified adjusted gross income ($150,000 joint).
• Qualified tips (2025–2028): deduction of up to $25,000 for eligible tipped occupations, reduced at higher incomes.
• Qualified overtime (2025–2028): deduction of up to $12,500 ($25,000 joint) for the premium portion of overtime pay, reduced at higher incomes.
• Car loan interest (2025–2028): deduction of up to $10,000 of interest on a qualifying personal-use vehicle loan made after 2024, reduced above $100,000 of modified adjusted gross income ($200,000 joint).

Eligibility rules apply to each item. See the IRS overview of the new provisions, or ask us how they apply to you.

1. Before December 31 — Key Deadlines

Give these items extra attention before the calendar year closes:

• ☐  Roth conversions: generally must be completed by December 31 to be taxable in that calendar year. Start transfers early enough for your custodian to complete them.
• ☐  Required minimum distributions (RMDs): most annual RMDs are due by December 31. First-year and inherited-account rules may differ.
• ☐  Charitable gifts: contributions generally must be completed by December 31 for that calendar year. Check delivery and processing dates for securities and other noncash gifts.
• ☐  Qualified charitable distributions (QCDs): IRA owners age 70½ or older can give directly from an IRA to an eligible charity; the distribution must be completed by December 31 to count for the year.
• ☐  Employee retirement plan deferrals: many workplace salary deferrals must be made through payroll by year-end; confirm your plan and payroll deadlines.

Not everything has a December 31 deadline. IRA and HSA contribution deadlines often fall in the following year; see section 3: What Can Wait.

2. Before December 31 — Nine Areas to Review

Review Your Income and Tax Situation

• ☐  Estimate income: include wages, bonuses, business income, investment income, and other taxable items.
• ☐  Review unusual transactions: consider capital gains, asset sales, and one-time income.
• ☐  Plan ahead: discuss the timing of income, deductions, and payments where flexibility exists.

Evaluate Retirement Planning and Distributions

• ☐  Review contributions: check employer retirement plan and IRA contributions.
• ☐  Consider Roth conversions: evaluate current and future tax brackets before converting.
• ☐  Confirm required minimum distributions: verify the amount for each applicable retirement account; most annual RMDs are due December 31, but exceptions apply.
• ☐  Inherited accounts: confirm beneficiary-specific distribution requirements and qualified charitable distribution eligibility, if relevant.

Review Investment Gains and Losses

• ☐  Review gains and losses: consider whether tax-loss harvesting is appropriate.
• ☐  Watch timing: coordinate planned sales with wash-sale rules and other limits.
• ☐  Coordinate advisors: discuss investment and tax considerations together.

Evaluate Charitable Contributions

• ☐  Review giving: consider cash gifts, appreciated securities, and donor-advised funds.
• ☐  Confirm timing: complete gifts by the applicable deadline and obtain proper documentation.
• ☐  Check benefits: deductibility varies with current law, income, and other circumstances.
• ☐  Consider bunching: with the new 0.5% minimum for itemizers, combining several years of giving into one year—directly or through a donor-advised fund—may produce a larger deduction.

Review Itemized Deductions

• ☐  Review key areas: state and local taxes, mortgage interest, qualifying medical expenses, and charitable giving.
• ☐  Compare options: determine whether itemizing could be more favorable than the standard deduction. With the higher 2026 standard deduction (see What’s New), fewer households benefit from itemizing.
• ☐  Check limits: review current deduction limitations before accelerating payments.

Review Education and Family Tax Planning

• ☐  Education: review potential education credits and 529 contributions, including state rules.
• ☐  Dependent care: check qualifying expenses and employer benefits.
• ☐  Family changes: confirm dependents and eligibility for relevant credits.

Evaluate Health Savings Account Opportunities

• ☐  Check eligibility: confirm coverage and other HSA requirements.
• ☐  Review contributions: compare payroll and direct contributions with applicable limits.
• ☐  Mind the deadline: eligible contributions may generally be made until the next federal individual filing deadline, without extensions.

Review Tax Withholding and Estimated Payments

• ☐  Estimate the balance: compare expected tax with withholding and payments already made.
• ☐  Adjust if needed: evaluate remaining payroll withholding and estimated payment options.
• ☐  Avoid surprises: check federal and state underpayment rules.

Consider Major Life Changes

• ☐  Review major events: marriage, divorce, retirement, inheritance, home sales, business transactions, or changes in dependents.
• ☐  Discuss implications: important life changes can affect withholding, credits, filing status, and planning opportunities.

3. After December 31 — What Can Wait

Some tax deadlines extend into the following year. These are general federal dates; actual due dates may shift for weekends, holidays, and special circumstances.

An extension to file generally does not extend the deadline to pay income tax.

4. Preparing for Tax Filing

Start gathering these documents as they arrive:

• ☐  W-2s, 1099s, and other income documents
• ☐  Investment and retirement account statements
• ☐  Mortgage, property tax, and charitable giving records
• ☐  Education, dependent care, and HSA information
• ☐  Business income and expense records, if applicable
• ☐  Records of major transactions or life changes

Additional Resources

• Looking ahead: IRS: Tax Inflation Adjustments for Tax Year 2027
• IRS: Retirement Plan and IRA Required Minimum Distributions FAQs
• IRS Publication 505 — Tax Withholding and Estimated Tax
• IRS: Retirement Plans
• IRS Publication 502 — Medical and Dental Expenses

Don’t Wait Until Tax Season to Start Planning

Set aside some time to review your situation before year-end. Once December 31 passes, some opportunities may no longer be available.

Not sure where to start? Music Retail Accountants & Specialists helps individuals and business owners make informed tax-planning decisions.