Don’t Leave Money on the IRS’s Table: Your Year-End Savings Checklist
There is a particular kind of regret that shows up every April. It sounds like, “Wait, I could have done what before December 31st?” By then, of course, it is too late. The window closes on New Year’s Eve, not tax day.
So before the holidays swallow your calendar whole, let’s talk about the moves that are still on the table right now. The ones that quietly shrink your tax bill if you make them before the ball drops, and disappear if you don’t.
At Bayerkohler, Ltd., we spend December fielding the same question in a dozen different forms: “Is there anything else I should be doing?” Usually, yes. Here is the checklist we walk our own clients through.
1. Max Out Retirement Contributions — Especially If You Got a Raise
Employees can contribute up to $24,500 to a 401(k), 403(b), or governmental 457 plan in 2026, up from $23,500 in 2025. If you are 50 or older, the regular catch-up limit can bring the total to $32,500, and if you attain age 60–63 during 2026, the higher catch-up limit can bring the total to $35,750, if the plan permits it. If you have a workplace plan, check your last few pay stubs. Most payroll systems let you adjust contribution percentages up until the last pay period of the year, and even a few extra paychecks at a higher rate can meaningfully change your taxable income.
Don’t have a 401(k), or already maxing it out? Traditional and Roth IRA contributions are capped at $7,500 for 2026, with an additional $1,100 if you are 50 or older. Good news here: unlike the 401(k) deadline, you actually have until the tax filing deadline in April to make an IRA contribution and have it count for 2026. But if cash flow allows, doing it now means the money starts growing sooner instead of sitting in checking.
** IRA contributions are subject to eligibility rules. Roth IRA contributions may be limited or unavailable at higher income levels, and traditional IRA contributions may not be fully deductible if you or your spouse are covered by a workplace retirement plan.**
2. Use It or Lose It: FSAs
Flexible Spending Accounts don’t roll over the way HSAs do. If you set aside pre-tax dollars for medical expenses this year and haven’t spent them, check your plan’s rules because some allow a $670 carryover into 2027 or a grace period to March 15th, but many don’t. Either way, now is the time to book that dental cleaning, refill contacts, or stock up on FSA-eligible items before the balance evaporates.
3. Harvest Your Investment Losses
If any of your taxable investments are sitting underwater, selling them before year-end lets you use those losses to offset capital gains elsewhere in your portfolio. If losses exceed gains, individuals can generally use up to $3,000 of net capital losses to offset ordinary income each year, with any remaining loss carried forward. Just watch the wash-sale rule: buying back the same or a “substantially identical” security 30 days before or after the sale disqualifies the loss. This is one of those moves that sounds simple and gets complicated fast depending on what else is happening in your portfolio, so it is worth a quick call before you hit sell.
4. Bunch Your Charitable Giving
Standard deductions are high enough now that plenty of taxpayers don’t get any extra benefit from itemizing small, spread-out donations. One workaround: “bunch” two or three years of giving into a single tax year, often through a donor-advised fund, so you clear the itemization threshold that year, then take the standard deduction in the years between. If you have been giving steadily but never itemizing, this is worth running the numbers on before December 31st.
5. Take Your Required Minimum Distribution
If you are 73 or older, RMDs are mandatory whether you need the cash or not. Miss your Required Minimum Distribution deadline and the penalty is steep: 25% of the amount you should have withdrawn, though it can drop to 10% if corrected quickly. This is one of the easiest, most expensive mistakes to make simply by forgetting, so if you have not confirmed this year’s RMD has been taken, do it this week.
6. Review Your Withholding — Don’t Wait for the Refund Surprise
A big refund feels great, but it means you gave the government an interest-free loan all year. A big tax bill feels worse and can come with an underpayment penalty attached. Pull up your most recent pay stub and compare your year-to-date withholding against what you actually expect to owe. There is still time to adjust your W-4 for the last pay period or two if the gap looks meaningful.
7. Business Owners: Time Your Income and Expenses
If you run a business, you often have more control over when income and deductions land than employees do. Accelerating deductible purchases on equipment, supplies, and that software subscription you have been meaning to renew into this year can lower this year’s taxable income. Conversely, if you expect to be in a lower bracket next year, deferring some invoicing into January might make more sense. There is no universal right answer here; it depends entirely on your specific numbers, which is exactly the kind of thing worth reviewing with your accountant rather than guessing.
8. Fund a 529 Plan
If you have kids, grandkids, or nieces and nephews with education on the horizon, many states offer a state income tax deduction or credit for 529 plan contributions made by December 31st. Even if the federal benefit is limited, that state-level break can be worth locking in before the year closes.
The Bottom Line
None of these moves require a financial windfall or a complicated restructuring of your life. Most of them take an afternoon, a phone call, or a few clicks in your benefits portal. What they do require is doing them before December 31st, because unlike almost everything else in the tax code, this deadline doesn’t bend.
If you are not sure which of these apply to your situation, that is what we are here for. At Bayerkohler Ltd, Year-end planning isn’t an afterthought; it’s a strategy, and timing is everything. Reach out before your calendar fills up with holiday plans instead of tax planning, and let’s make sure you are not the one telling us in April what you wish you would have known in December.