10 year-end tax planning tips for high earners in 2026

For high-income and high-net-worth individuals, decisions around income, investments, retirement and charitable giving can have significant tax implications. The final months of the year offer an opportunity to look across your financial picture and identify actions that could affect both your current tax liability and long-term goals.

With key deadlines approaching, it can be an especially important time for putting these plans into action. These 10 year-end tax planning strategies can help you identify potential tax savings, manage taxable income and prepare for the year ahead.

1Review your tax payments

By the fourth quarter, you should have a clearer picture of your expected 2026 income and tax liability. Reviewing your withholding and estimated tax payments now can help you determine whether you're on track—or whether you need to make adjustments before the end of the year.

Check for potential underpayments

This step can be particularly important if you've received investment or business income that isn't subject to regular withholding or experienced a significant change in income during the year. If your payments are falling short, increasing withholding or making an estimated tax payment could help you avoid an unexpected tax bill or potential underpayment penalties.

Revisit business owner income and compensation

If you own a closely held business, you may have additional year-end planning opportunities related to how and when you're compensated. Depending on your business structure and circumstances, consider how decisions around salary, bonuses, distributions and the timing of income might affect your overall tax position.

2Make the most of year-end gifting

If transferring wealth to family members or other beneficiaries is part of your estate plan, review any gifts you may want to complete before December 31. Acting before the deadline can help you make use of your annual gift tax exclusion while considering how different types of gifts fit within your wealth transfer strategy.

Take advantage of 2026 gifting limits

In 2026, you can give up to $19,000 per recipient without using any of your lifetime estate tax exemption, as long as the gift qualifies for the annual gift tax exclusion. Married couples may be able to combine their annual exclusions to give up to $38,000 per recipient. Contributions to a 529 education savings plan also count toward the annual exclusion and can generally be front-loaded with 5 years' worth of gifts.

Look beyond cash gifts

Depending on your goals, you may also want to consider gifting real estate or other assets with the potential for future appreciation, such as investments or shares in a family business. Transferring these assets can shift future appreciation outside your taxable estate—although recipients generally assume your cost basis in gifted assets, which can have future income and capital gains tax implications. If you're gifting interests in a family limited partnership, LLC or other closely held business, work with your tax and legal advisors to determine any valuation and appraisal requirements.

For larger or more complex transfers, certain irrevocable trusts provide another way to transfer assets and future appreciation outside your taxable estate while establishing parameters for how assets ultimately pass to beneficiaries.

3Manage retirement account distributions

The amount and timing of retirement account distributions can affect your taxable income, and certain required distributions must be completed by specific deadlines. If you're retired or taking distributions from retirement accounts, review your 2026 withdrawals now to identify any actions you'll need to take before December 31.

Confirm required minimum distributions

If you're required to take required minimum distributions, or RMDs, confirm that you've withdrawn the required amount for 2026. The deadline is December 31 for most individuals already taking RMDs. Failing to take the full amount could result in a 25% excise tax on the shortfall, although the tax may be reduced to 10% if the missed distribution is corrected within the applicable time frame.

Consider the tax impact of additional distributions

If you're considering taking additional retirement account distributions in the final months of 2026, look at how the extra income could affect your overall tax picture. Larger taxable withdrawals could push more of your income into a higher tax bracket or affect other income-based taxes and costs, including Medicare premiums.

4Plan charitable giving strategically

With new tax rules affecting charitable deductions, it's important to review your charitable giving strategy. Consider whether the timing and structure of your gifts could help you maximize potential tax benefits before December 31.

Account for new charitable giving rules

Under the One Big Beautiful Bill Act, or OBBBA, taxpayers who itemize can generally deduct charitable contributions only to the extent they exceed 0.5% of adjusted gross income. New limits also generally reduce the tax benefit of itemized deductions for taxpayers in the 37% tax bracket, effectively limiting the value of affected deductions to 35%. These changes could make certain giving strategies particularly valuable for high earners.

Bunch charitable gifts

Bunching several years of contributions into a donor advised fund, or DAF, could help maximize potential deductions under the new rules. A DAF is a charitable giving vehicle that allows you to make an irrevocable charitable contribution and recommend grants to eligible charities over time. Contributions made by December 31 may qualify for a 2026 charitable deduction.

Redirect RMDs to charity

If you still need to take some or all of your 2026 RMDs, consider whether a qualified charitable distribution, or QCD, fits your giving strategy. Those 70 1/2 or older can donate up to $111,000 directly from an IRA to eligible charities through a QCD. The distribution can count toward your RMD and is generally excluded from taxable income—providing a potential tax benefit even if you don't itemize.

5Reassess your state tax strategy

If you have significant state and local tax exposure or financial ties to multiple states, now is an ideal time to review how those obligations affect your overall tax strategy and identify potential planning opportunities.

Address multistate tax considerations

If you own homes or conduct business in multiple states, consider whether changes during the year could affect your state tax obligations. Residency and domicile, the number of days spent in each state and the sourcing of income can all factor into your tax treatment. If you've recently moved or divide your time among multiple states, work with your tax advisor to confirm your status and documentation before the end of 2026.

Account for SALT changes

For 2026, the cap on the state and local tax, or SALT deduction, has increased to $40,400 per household. However, the higher cap begins to phase down for taxpayers with modified adjusted gross income above $505,000, making year-end tax planning particularly important for some high earners. Pass-through business owners may also have additional opportunities to deduct state and local taxes at the entity level, depending on their state and circumstances.

6Consider a Roth IRA conversion

If a Roth IRA conversion is part of your retirement strategy, the remaining months of 2026 provide an opportunity to evaluate whether the timing makes sense based on your current and expected future tax situation. A Roth IRA conversion could be worth exploring if your income was lower than usual this year or you expect to face a higher tax rate in the future.

Weigh the immediate and long-term tax impact

A Roth conversion generally requires paying income tax on the amount converted from a traditional IRA or eligible retirement account in the current year, but future growth and qualified withdrawals are generally tax-free. If a conversion makes sense for your situation, it must be completed by December 31 to count for the 2026 tax year.

Before converting, consider how the additional taxable income could affect your federal tax bracket, state taxes and Medicare premiums, if applicable.

7Plan for year-end investment income

Investment decisions late in the year can have tax consequences. Reviewing your portfolio before the end of the year can help you identify potential tax considerations and determine whether adjustments may be appropriate.

Anticipate investment distributions

Identify anticipated dividends and capital gains distributions from investments held in taxable accounts. For high earners, significant investment income could increase your overall tax liability and may also have implications for the net investment income tax and estimated tax payments.

Identify deductible investment interest

If you've borrowed money to make investments, you may be able to deduct the interest expense up to the amount of your net investment income for 2026. This can apply to loans used to purchase stocks, bonds and certain other investments, as long as you can properly trace the borrowed funds to their investment use.

Time mutual fund purchases carefully

If you're considering buying mutual fund shares in a taxable account late in the year, check the fund's distribution schedule first. Purchasing shares shortly before a capital gains distribution could leave you owing tax on the distribution even though you only recently invested. Depending on the circumstances, waiting until after the distribution may be more tax-efficient.

8Manage investment gains and losses

Now is a good time to review unrealized gains and losses in your portfolio and consider whether strategically realizing either could improve your overall tax position.

Harvest losses to offset gains

Tax-loss harvesting involves selling investments at a loss to help offset capital gains realized elsewhere in your portfolio. If your capital losses exceed your capital gains for the year, you can generally deduct up to $3,000 of the remaining net loss against ordinary income. Additional losses can generally be carried forward to offset gains or income in future years.

Consider realizing gains strategically

Tax planning doesn't always mean deferring gains. If you expect to be subject to higher tax rates in future years, realizing certain gains now may allow you to recognize them at a potentially lower rate while increasing your cost basis in the investment.

Be mindful of the wash-sale rule

If you plan to reinvest after realizing a loss, be aware of the wash-sale rule. Your loss may be disallowed if you purchase the same or a substantially identical security within 30 days before or after the sale.

Realizing gains or losses can provide tax benefits, but taxes shouldn't be the only consideration when deciding whether to sell an investment. Any decision to sell or reinvest should align with your broader investment strategy.

9Review concentrated stock and equity compensation

If a significant portion of your wealth is tied to employer stock, founder shares or equity compensation, the end of the year can be an opportunity to consider concentration risk and the tax implications of planned transactions.

Manage concentration risk

Holding a large portion of your portfolio in a single company can increase investment risk. Diversification, charitable gifting of appreciated shares and other strategies may help reduce concentration while supporting your broader financial goals. As you evaluate your options, consider the potential tax implications of selling or transferring appreciated shares.

Evaluate stock option exercise timing

If incentive stock options, or ISOs, are part of your compensation, when you exercise them can have significant tax implications. Although exercising an ISO generally doesn't generate regular taxable income, the difference between the exercise price and the stock's fair market value may be included in the calculation of the alternative minimum tax, or AMT.

The number of options you exercise and when you exercise them can affect your 2026 tax liability, while ISO holding periods can influence the tax treatment of a future sale. Work with your tax and financial advisors to evaluate your options in the context of your income, AMT exposure and broader financial plan.

10Coordinate trust income and distribution strategies

If trusts are part of your wealth and estate plan, the end of the year is an opportunity to assess how trust income is being managed and whether any distributions should be made before the end of 2026. Because trusts reach the highest federal income tax bracket at relatively low levels of taxable income, distribution decisions can have significant tax implications.

Evaluate year-end distributions

Depending on the terms of the trust and the circumstances of its beneficiaries, distributing income could shift the associated tax liability from the trust to beneficiaries. Work with your tax and legal advisors to evaluate potential distributions based on the trust's distributable net income, beneficiary tax considerations and your broader wealth transfer goals.

Consider investment income and capital gains

Review how investment income and capital gains are treated within the trust as part of your year-end planning. The tax treatment of these amounts can differ depending on the trust's terms, applicable law and whether income or gains are retained or distributed.

The bottom line

The final months of 2026 offer an important window to review your tax strategy and identify opportunities that may require action before December 31. Because decisions around income, investments, retirement accounts, charitable giving and wealth transfer can affect one another, it's important to consider them as part of your broader financial plan.

Effective tax planning often requires coordination across your financial, tax and legal advisors. A wealth consultant can help you look at the bigger picture and determine how different strategies may work together.