Year-End Tax Planning: The Overlooked Moves That Could Shape Your 2026 Outlook
This week’s insight is a reminder that it’s not too late to spruce up your 2025 tax situation.
The clock is ticking down to the end of the year. There’s only about three weeks to shore up your tax strategy ahead of 2026. For individuals and W-2 employees, you may still have a paycheck or two left to increase your 401(k) contributions—that may be priority No. 1. High-income earners may favor pre-tax contributions, while those in moderate brackets might lean toward Roth options. Don’t sweat IRA or Health Savings Account (HSA) contributions for now, since you have until April 15, 2026, to max out those accounts.
Elsewhere across the personal finance spectrum, open enrollment season is wrapping up soon. So, ensure that you have the right coverage for 2026. Remember: you can pair a High-Deductible Health Plan (HDHP) with an HSA to keep monthly premiums relatively low while boosting your long-term investment plan.
Turning to small business owners, begin by reviewing your business structure. You shouldn’t overhaul the company’s entity every year, but if revenue, profits, or payroll have shifted meaningfully since last year, it might be worth evaluating whether an LLC taxed as an S corp, a C corp, or another structure better aligns with your 2026 tax outlook. There’s no doubt that many small businesses are struggling right now, so being realistic about what could lie ahead is key.
Entrepreneurs must also be aware of the One Big, Beautiful Bill Act (OBBBA), which passed in the summer. Along with extending existing income tax rates, the legislation allows full expensing of manufacturing structures that begin construction after January 19, 2025, and before January 1, 2029. Per the new rules, structures also must be completed by January 1, 2031. So, this “bonus depreciation” feature may make improvements and expansion projects more appealing.
In terms of payroll, business owners with equity compensation plans should review whether an 83(b) election is appropriate, assess ISO holding periods, and possibly push stock sales into 2026 to help reduce taxes. It’s all situation-dependent.
Finally, the days are counting down to implement strategies like tax-loss harvesting, meet mandates like taking annual Required Minimum Distributions (RMDs), and spend any “use it or lose it” Flexible Spending Account (FSA) dollars. Charities are also busy in December, particularly in the week leading up to New Year’s, so have your giving strategy buttoned up soon.
Amid all the hustle and bustle of the season, don’t neglect your finances. Both individuals and business owners should review their financial plans to take advantage of tax-saving opportunities while avoiding missed deadlines ahead of 2026.
