By the time most people think about taxes, the year is already over and the opportunities are gone. The truth is that the best tax planning happens in the fourth quarter, while you still have time to act. Here are the levers worth reviewing before December 31.
Use the accounts the tax code rewards
Max out the tax-advantaged accounts available to you, 401(k), IRA, HSA, where it makes sense. These are some of the few places the tax code is genuinely on your side, and the contribution windows don't wait.
Harvest losses, and gains, on purpose
A down position can be turned into a tax asset by realizing the loss and offsetting gains elsewhere. In lower-income years, the opposite can be true: deliberately realizing gains while your bracket is low. Both are situational, which is exactly why they're worth a conversation.
Mind the year-end deadlines
- Required minimum distributions if you're 73 or older.
- Charitable giving, including donating appreciated stock instead of cash.
- Roth conversions in a year when your income dips.
None of these are exotic. They're ordinary moves that quietly add up, as long as you make them before the window closes. If you're not sure which apply to you, that's a perfect reason for a quick year-end review.
