Year-End Tax Planning Checklist: 12 Moves to Make Before December 31

The tax moves you make between now and December 31 can save you thousands of dollars — or cost you dearly if you do nothing. This year-end tax planning checklist outlines 12 specific, actionable strategies to reduce your tax bill, boost your refund, and set yourself up for a stronger financial year ahead. At Elite Pro-Tax, our tax planning services help Greenville, SC individuals and business owners keep more of what they earn — but time-sensitive strategies demand action before the calendar flips.

Table of Contents

·         1. Max Out Your Retirement Contributions

·         2. Harvest Tax Losses in Your Investment Portfolio

·         3. Defer Income to Next Year

·         4. Accelerate Deductions Into This Year

·         5. Bunch Charitable Contributions

·         6. Review Your S-Corp Salary

·         7. Prepay Business Expenses

·         8. Check Your Estimated Tax Payments

·         9. Review Your Withholding

·         10. Contribute to Your HSA

·         11. Review Capital Gains and Losses

·         12. Consider a Roth IRA Conversion

·         Frequently Asked Questions

·         Ready to Build Your Year-End Tax Plan?

1. Max Out Your Retirement Contributions

Retirement contributions are one of the most powerful tax deductions available, and the deadline for most accounts is December 31. Traditional and Roth IRAs get an extension until the April filing deadline, but don't rely on that — act now while it's on your radar.

2026 Contribution Limits:

·         401(k)/403(b): $23,500 ($31,000 if age 50+; $34,750 if age 60-63 under SECURE 2.0's super catch-up provision)

·         Traditional/Roth IRA: $7,000 ($8,000 if age 50+)

·         SEP-IRA: Up to 25% of net self-employment income, maximum $70,000

·         SIMPLE IRA: $16,500 ($17,500 if age 50+)

Every dollar contributed to a traditional 401(k) or traditional IRA reduces your taxable income dollar-for-dollar. If you're in the 22% federal bracket, maxing out your 401(k) at $23,500 saves $5,170 in federal taxes alone — plus additional savings on South Carolina state income tax. Check your latest pay stub, calculate how much room remains, and increase your contribution percentage for remaining pay periods.

2. Harvest Tax Losses in Your Investment Portfolio

Tax loss harvesting means selling investments that have declined in value to offset capital gains from winning investments. This strategy can eliminate your capital gains tax bill entirely — and even offset up to $3,000 of ordinary income per year, with unused losses carrying forward indefinitely to future tax years.

How it works:

·         Review your taxable brokerage accounts for positions trading below your purchase price (cost basis)

·         Sell losing positions before December 31 to realize the capital loss

·         Use those losses to offset capital gains from profitable sales made this year

·         If net losses exceed gains, deduct up to $3,000 against ordinary income

·         Carry forward any remaining unused losses to future tax years — they never expire

Important: The IRS wash-sale rule prevents you from repurchasing a "substantially identical" security within 30 days before or after the sale. You can buy a similar — but not identical — index fund or ETF to maintain market exposure while claiming the loss. For example, sell an S&P 500 index fund and purchase a total stock market fund.

3. Defer Income to Next Year

If you expect to be in the same or a lower tax bracket next year, consider pushing income past December 31. This is especially powerful for self-employed individuals, freelancers, and business owners who control the timing of their income recognition.

·         Delay invoicing clients until January for projects completed in late December

·         Ask your employer to push a year-end bonus into January if the company allows flexibility

·         Defer closing on an investment property sale until after January 1

·         Hold off on Roth conversions if your income is already pushing you into a higher bracket

·         Delay exercising stock options or selling vested RSUs if the income would bump your tax bracket

Deferring just $10,000 in income from the 24% bracket to the 22% bracket saves $200 in federal taxes. For business owners shifting larger amounts — say $30,000-$50,000 — the savings can reach $2,000-$5,000 or more when you factor in both federal and South Carolina state tax impacts.

4. Accelerate Deductions Into This Year

The flip side of deferring income is accelerating deductions. If you're going to spend the money anyway, spending it before December 31 gives you the tax benefit a full year sooner.

·         Prepay your January mortgage payment to claim an extra month of mortgage interest this year

·         Pay your Q4 estimated state income tax before December 31 (subject to the $10,000 SALT cap)

·         Stock up on deductible business supplies and equipment you'll need in Q1

·         Schedule and pay for medical procedures before year-end if you're close to the 7.5% AGI threshold for deducting medical expenses

·         Make your Q1 estimated federal tax payment early — before December 31 instead of waiting until January 15

This strategy works best when paired with income deferral. Together, they lower this year's taxable income from both directions — reducing income while simultaneously increasing deductions.

5. Bunch Charitable Contributions

The 2026 standard deduction is $15,000 for single filers and $30,000 for married filing jointly. If your total itemized deductions are close to but below these thresholds, "bunching" two or more years of charitable giving into a single tax year can push you over the line and unlock thousands in additional tax savings.

Example: A married couple normally donates $5,000 per year to charity. Instead of donating $5,000 this year and $5,000 next year, they donate $10,000 this year and $0 next year. Combined with $22,000 in other itemized deductions (mortgage interest, property taxes, state income tax), they can itemize this year at $32,000 and take the standard deduction ($30,000) next year — capturing more total deductions over the two-year period than splitting them evenly.

Donor-advised funds (DAFs) make bunching seamless. You contribute a lump sum to the DAF, claim the full charitable deduction this year, then distribute the money to your chosen charities over the next several years at your own pace. It's like a charitable savings account with an immediate tax benefit.

6. Review Your S-Corp Salary

If you operate as an S-Corporation, your officer salary is one of the most scrutinized items on your tax return. The IRS requires S-Corp owners to pay themselves a "reasonable salary" before taking distributions. Too low, and you risk IRS reclassification and penalties. Too high, and you're paying more payroll taxes than necessary.

·         Compare your salary to industry benchmarks for your role, experience level, and geographic location

·         Ensure your salary represents a reasonable percentage of net profits — typically 40-60%, though this varies by industry

·         Make any necessary salary adjustments in your final payroll run of the year

·         Verify that your quarterly payroll tax deposits (Form 941) are current to avoid late-deposit penalties

Not sure if your S-Corp is structured for maximum savings? Learn more about our S-Corp setup and advisory services, or schedule a year-end review to optimize your salary-to-distribution ratio before December 31.

7. Prepay Business Expenses

Cash-basis businesses — which includes most small businesses and sole proprietors — can deduct expenses in the year they're paid, regardless of when the service is actually delivered. This creates a valuable year-end opportunity to shift deductions into the current tax year.

·         Renew annual software subscriptions (QuickBooks, Adobe, project management tools) before December 31

·         Prepay Q1 office rent if your landlord will accept an early payment

·         Purchase equipment, computers, or furniture — Section 179 lets you deduct the full cost in the year of purchase, up to $1,250,000 for 2026

·         Stock up on inventory, office supplies, or marketing materials you'll need early next year

·         Pay outstanding invoices to contractors, vendors, or professional service providers before year-end

·         Prepay business insurance premiums for the upcoming year

A $5,000 equipment purchase made in December at a 24% tax rate saves you $1,200 in taxes — money you'd spend in January anyway. The key is buying things you genuinely need, not spending just for the sake of a deduction.

8. Check Your Estimated Tax Payments

If you're self-employed, a business owner, or have significant non-wage income (investments, rental properties, retirement distributions), you're likely required to make quarterly estimated tax payments. The Q4 estimated payment is due January 15, but paying it before December 31 can improve your year-end tax position.

·         Review your total estimated tax payments made so far (Q1 through Q3)

·         Compare your projected total income against total payments made to see if you're on track

·         Ensure you've paid at least 90% of this year's tax liability or 100% of last year's (110% if your AGI exceeds $150,000) to avoid the underpayment penalty

·         If you're short, increase your Q4 estimated payment or — for W-2 employees with side income — ask your employer to increase withholding on your final paychecks

The underpayment penalty is essentially an interest charge calculated on a quarterly basis. It's not catastrophic, but it's completely avoidable with proper year-end planning and a simple payment adjustment before the deadline.

9. Review Your Withholding

Even W-2 employees should review their tax withholding before year-end. Major life events — a new job, marriage, having a baby, buying a home, or a significant raise — can change your tax picture dramatically, and your W-4 from January may no longer match your reality in December.

·         Use the IRS Tax Withholding Estimator at irs.gov to check your projected refund or balance due based on current withholding levels

·         Submit an updated W-4 to your employer's HR department if you need to increase or decrease withholding

·         Little-known advantage: increasing withholding in your last few paychecks of the year can make up for earlier under-withholding — the IRS treats all W-2 withholding as if it was paid evenly throughout the year, even if it was all deducted in December

This is one of the easiest and fastest moves on this entire list. It takes less than 30 minutes to run the IRS estimator online and submit an updated W-4 to your payroll department.

10. Contribute to Your HSA

If you're enrolled in a high-deductible health plan (HDHP), a Health Savings Account (HSA) is one of the most tax-advantaged accounts in the entire tax code. HSAs are triple-tax-advantaged: your contributions are tax-deductible, investment growth inside the account is tax-free, and withdrawals for qualified medical expenses are completely tax-free.

2026 HSA Contribution Limits:

·         Individual coverage: $4,300

·         Family coverage: $8,550

·         Catch-up contribution (age 55+): Additional $1,000

Unlike retirement accounts, there's no income limit for HSA contributions. And unlike Flexible Spending Accounts (FSAs), unused HSA funds roll over indefinitely — there's no "use it or lose it" rule. If you can afford to pay current medical expenses out of pocket and let your HSA balance grow, it becomes one of the most powerful tax-free retirement savings tools available. Many financial planners consider the HSA the single best account in the tax code because of its unique triple-tax advantage.

11. Review Capital Gains and Losses

Before year-end, pull up your brokerage account statements and review your realized capital gains and losses for the year. Understanding your tax exposure helps you make informed decisions about additional sales, loss harvesting, or simply holding positions into the new year.

Long-term capital gains (assets held over one year) are taxed at preferential rates: 0%, 15%, or 20% depending on your taxable income. Short-term gains (assets held one year or less) are taxed as ordinary income — potentially at rates as high as 37%.

·         Net your realized gains against your realized losses — capital losses offset gains dollar-for-dollar

·         If net losses exceed gains, deduct up to $3,000 against ordinary income this year; carry forward the rest

·         Consider selling appreciated long-term assets in years when your income — and therefore your capital gains tax rate — is lower than usual

·         If your taxable income falls under $48,350 (single) or $96,700 (married filing jointly), you may be in the 0% long-term capital gains bracket — consider realizing gains completely tax-free

A personalized tax planning session helps you model different scenarios and time your investment sales for maximum after-tax returns — especially in years with unusual income patterns.

12. Consider a Roth IRA Conversion

A Roth conversion involves moving money from a traditional IRA or old 401(k) into a Roth IRA. You'll pay income taxes on the converted amount now, but all future growth and qualified withdrawals are completely tax-free — for life.

A Roth conversion makes strategic sense when:

·         Your income is temporarily lower this year (job transition, sabbatical, early retirement, or business downturn)

·         You expect to be in a higher tax bracket in the future due to income growth, Required Minimum Distributions, or potential tax law changes

·         You want to reduce future RMDs in retirement — Roth IRAs have no Required Minimum Distributions during the owner's lifetime

·         You have losses, deductions, or credits that can offset the conversion income and reduce the immediate tax cost

Critical deadline: Roth conversions must be completed by December 31 — there is absolutely no extension. Convert only enough to "fill up" your current tax bracket. Converting $50,000 from the 22% bracket into the 32% bracket costs $5,000 in unnecessary taxes on the portion that crosses the bracket threshold. Precision matters enormously.

Our tax preparation team works hand-in-hand with our planning services to ensure Roth conversions are executed at the right time, in the right amount, and with proper tax modeling.

Frequently Asked Questions

When is the deadline for year-end tax moves?

Most strategies on this list must be completed by December 31. The notable exception is IRA contributions (Traditional and Roth), which can be made until the April filing deadline. However, 401(k) contributions must flow through payroll, so your last paycheck of the year is effectively the deadline for those.

How much can year-end tax planning actually save me?

Savings vary based on income level, tax bracket, and which strategies apply. Typical clients save $2,000-$10,000 or more through a combination of these moves. Business owners and high-income earners who implement multiple strategies often save significantly more — especially when combining S-Corp salary optimization, retirement contributions, and equipment purchases.

Should I implement all 12 of these strategies?

Not necessarily. The right combination depends on your specific situation — income level, filing status, business structure, investment portfolio, and financial goals. A professional tax planning session identifies which strategies deliver the biggest return for your unique circumstances and prevents moves that could backfire.

Can I still do tax planning if it's already December?

Absolutely. Many of the highest-impact strategies — retirement contributions, equipment purchases, loss harvesting, HSA funding, and Roth conversions — can be executed in a matter of days. The key is acting decisively before December 31. Even scheduling a planning session today can put thousands of dollars of savings in motion.

Is year-end tax planning only for business owners?

Not at all. W-2 employees benefit enormously from reviewing withholding, maximizing retirement contributions, funding an HSA, implementing charitable giving strategies, and optimizing investment tax planning. Everyone — regardless of employment type — has opportunities to reduce their tax burden with thoughtful year-end planning.

Ready to Build Your Year-End Tax Plan?

Don't leave money on the table. Elite Pro-Tax & Financial Services helps Greenville, SC individuals and business owners build customized year-end tax strategies that produce real, measurable savings. Schedule a tax planning session before December 31 to take advantage of every strategy on this checklist.

Book your planning session online, contact us, or call (864) 781-4035 today. The clock is ticking — but it's not too late to save.