Year-End Planning Before the Calendar Runs Out

By Jeff Weeks, CFP® | ATX Portfolio Advisors

By November, the calendar starts filling itself. Football, Thanksgiving, holiday travel, and whatever was supposed to get done before everyone disappeared for a week. In Austin, the weather may or may not cooperate with the season. The tax calendar is more dependable.

I like to approach year-end planning by asking what has changed and which decisions actually need to be made before December 31. A new grandchild, retirement, a large bonus, or a concentrated stock position can matter more than another generic checklist. This year, changes to charitable deductions deserve particular attention.

December 31 is a deadline, but it should not be the boundary of your financial plan. Before accelerating a gift, deferring income, or converting retirement money, I would compare this year with the next several years. The smallest possible tax bill this April is not necessarily the best long-term result.

1. Decide how to give before deciding what to sell

Beginning in 2026, taxpayers who take the standard deduction can also deduct up to $1,000 of qualifying cash contributions to eligible charities, or $2,000 for married couples filing jointly. Donations of stock and contributions to donor-advised funds do not qualify for this particular deduction. Keep the receipts even if you do not expect to itemize.

For itemizers, a new floor means charitable contributions are generally deductible only to the extent they exceed 0.5% of adjusted gross income. At $300,000 of AGI, that is a $1,500 threshold. A $5,000 qualifying cash gift would leave $3,500 potentially deductible before other limits. That changes the calculation, particularly for households making similar gifts every year.

Bunching several years of planned giving into one year may help clear that floor and make itemizing more useful. A donor-advised fund can separate the timing of your contribution from the timing of grants to charities. Contributions are irrevocable, however, and administrative, investment, and advisory expenses can apply. I would compare the benefit with those costs.

If you own appreciated stock that you have held for more than a year, donating shares directly may avoid realizing a capital gain while generating a potential deduction. Cash gifts to public charities generally have a 60% AGI limit; gifts of long-term appreciated stock generally have a 30% limit. Additional restrictions can apply, particularly at higher incomes. A deduction reduces the cost of giving; it does not reimburse the gift.

2. If you are eligible, consider giving from your IRA

A qualified charitable distribution, or QCD, allows someone age 70½ or older to transfer money directly from an eligible IRA to a qualifying charity. For 2026, the limit is $111,000 per eligible person. A qualifying transfer can satisfy all or part of an IRA required minimum distribution.

You do not claim a charitable deduction for the same dollars because they are excluded from taxable income instead. That distinction can make a QCD useful even if you take the standard deduction. Depending on your circumstances, keeping income off the return may also be more helpful than adding an itemized deduction.

The mechanics matter. A QCD cannot go to a donor-advised fund, and a withdrawal you already received personally cannot simply be relabeled a QCD. I would coordinate charitable transfers with the remaining RMD before taking additional withdrawals. Allow time for processing and keep the charity’s acknowledgment.

3. Make family gifts serve a purpose

The 2026 annual gift-tax exclusion is $19,000 per donor, per recipient. A married couple can generally give $38,000 combined to each recipient when properly structured. Unused annual exclusions do not carry forward. But they are also not a requirement to give away money you may need yourself.

Giving more than the exclusion does not automatically mean gift tax is due. It may mean filing a gift-tax return and using part of your lifetime exemption. Gift splitting and gifts through trusts have additional requirements. I would involve your tax preparer or estate attorney before assuming a transfer needs no reporting.

For education, a 529 plan can put the gift toward a specific goal. A special election allows a larger contribution to be spread over five years for gift-tax purposes, but requires reporting and coordination with other gifts. Paying qualifying tuition directly to the school is another option that uses neither the annual exclusion nor the lifetime exemption. Room, board, and books do not qualify for that separate tuition exclusion.

Trump accounts add another choice for families saving for eligible children, with different investment, withdrawal, and gift-tax rules from 529 plans. I would start with what the money is intended to accomplish and compare the accounts from there. Before funding either, make sure your own retirement plan can support the gift.

4. Review gains and losses with the portfolio in mind

Tax-loss harvesting means realizing investment losses that may offset taxable capital gains. It can be useful when selling appreciated shares, rebalancing, or reducing a concentrated position. I would start with the portfolio you want to own and then work through the tax cost of getting there. Selling something just because it is down is not much of an investment policy.

Watch the wash-sale rules, which can disallow a loss when substantially identical securities are purchased within 30 days before or after the sale. Automatic dividend reinvestments, a spouse’s purchases, and IRA activity can complicate the picture. A December sale can create a January problem if you repurchase too soon. Review the whole household’s activity.

5. Run a tax projection before moving retirement money

A Roth conversion may deserve consideration in a lower-income year, especially between retirement and the start of Social Security or required distributions. The taxable portion adds income now in exchange for potential tax advantages later. I would compare today’s tax cost with likely future withdrawals, cash available for taxes, and possible effects on Medicare premiums or other benefits. Converting the largest possible amount is not necessarily the best result.

The larger state and local tax deduction also deserves attention. For 2026, the cap is generally $40,400, although it shrinks at higher incomes and different limits apply to married taxpayers filing separately. Here in Texas, eligible property taxes and sales taxes can still make this meaningful. Additional income from a conversion could reduce that deduction, so I would include the interaction in the projection.

Conversions generally need to be completed by December 31, and an RMD cannot be converted. Ordinary IRA contributions generally have a later deadline. Business owners should confirm their retirement plan’s specific election and funding deadlines rather than assuming every contribution follows the same calendar.

If you are still working, check your remaining payroll opportunities. Participants turning 60 through 63 may qualify for a larger catch-up contribution. Beginning in 2026, employees whose prior-year Social Security wages from the employer sponsoring the plan exceeded $150,000 generally must make catch-up contributions as Roth contributions. Confirm how your plan applies the rules before the last paycheck.

6. Make sure the tax bill has a funding plan

A large gain, bonus, or Roth conversion can leave withholding and estimated payments short of the projected bill. Meeting an estimated-tax safe harbor can help avoid an underpayment penalty, but you may still owe a substantial balance when you file. Avoiding a penalty and paying the entire tax bill are separate objectives.

Increasing withholding before year-end may help address a shortfall because withholding is generally treated as paid evenly throughout the year. Estimated payments follow different timing rules. I would review both with your tax preparer and set aside the cash rather than letting April become a financing problem.

Give yourself time to act

You do not need to execute every strategy on this list. Pick the two or three decisions that matter to your household and coordinate them with your advisor, CPA, and attorney as appropriate. Stock donations, family transfers, and retirement-account transactions can take longer than expected. Beneficiary designations and estate documents deserve a look, too, particularly after a family change.

As an Austin financial planner, I would rather help evaluate these choices while there is still time to implement them. If you would like help reviewing your year-end plan, get in touch through the ATX Portfolio Advisors contact page.

Then get back to the rest of the calendar.