As the year winds down, it's the perfect time to review your financial situation and take steps to minimize your tax burden. Here are strategies that could make a meaningful difference.
Maximize Retirement Contributions
If you haven't maxed out your 401(k) or IRA contributions, there may still be time. For 2026, the 401(k) contribution limit is $23,500 ($31,000 if you're 50 or older). IRA contributions can be made until the tax filing deadline.
Tax-Loss Harvesting
If you have investments that have lost value, consider selling them to offset capital gains. You can use up to $3,000 in net losses to offset ordinary income, and carry forward any excess losses to future years.
Roth Conversions
If you're in a lower tax bracket this year, it may be a good time to convert traditional IRA funds to a Roth IRA. You'll pay taxes now but enjoy tax-free growth and withdrawals in retirement.
Charitable Giving
Donating appreciated securities directly to charity allows you to avoid capital gains taxes while getting a charitable deduction. If you're 70½ or older, qualified charitable distributions from your IRA can satisfy your required minimum distribution.
Review Your Withholding
Make sure you're not overpaying or underpaying taxes throughout the year. Adjust your W-4 if needed to avoid a large bill — or a large refund — at tax time.
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