Here's the lowdown
The 2026 charitable deduction rules make the timing of gifts more important for both itemizers and non-itemizers.
The higher SALT cap, retirement moves and estimated payments all depend on a client's full-year income picture, not a December checklist alone.
Investors who deferred gains through the original opportunity-zone program need cash ready for the tax tied to the 2026 inclusion date.
December is the deadline, not the strategy
Here's the thing: year-end tax planning can turn into a frantic hunt for deductions. Ask one better question: What changes if a client moves income, a deduction or a payment across Dec. 31?
Several rules changed at once. Charitable deductions have new limits. The SALT deduction is larger but still complicated. Retirement moves can create taxable income now. And one old opportunity-zone promise is coming due.
Put 2026 next to 2027, then model the client's likely income, deductions, gains and cash needs. A move that saves money this December can cost more next April.
1. Charitable gifts now have a floor and a lid
For taxpayers who do not itemize, 2026 brings an above-the-line charitable deduction of up to $1,000 for an individual or $2,000 for a married couple filing jointly. A gift may now help even when the taxpayer takes the standard deduction.
Itemizers face more friction. Charitable deductions are subject to a floor equal to 0.5% of adjusted gross income. The source also reports a separate reduction that disallows 2/37 of affected itemized deductions. In plain English, part of the gift may not produce a deduction at all.
That makes bunching worth testing. A client might combine planned gifts or use a donor-advised fund. Bottom line: a deduction is not a reason to give money the client did not plan to donate.
2. The bigger SALT cap still needs income planning
The federal deduction for state and local taxes is generally capped at $40,400 for 2026. That sounds generous next to the old $10,000 cap, but the benefit can shrink for taxpayers near the income phase-down range.
CPAs should test the timing of bonuses, option exercises and other controllable income. A payment on Dec. 30 and the same payment on Jan. 2 can land in different tax years. That can affect the SALT deduction, marginal tax rates and other income-based limits.
Business owners may also have a state pass-through entity tax election. The details differ by state. Confirm the election date, payment date and owner-level credit before moving cash.
3. Retirement decisions can move tax across years
Year-end tax planning should cover IRAs, 401(k)s, 529 plans, new accounts for children and catch-up contributions for clients age 50 and older.
The deadlines are not all the same. Some workplace moves must happen by year-end. A sole proprietor may have longer to fund a solo 401(k). The plan document and contribution type control the date.
A Roth conversion deserves its own model. Moving money from a traditional IRA to a Roth generally creates taxable income now. The IRS Roth comparison chart is a useful start, but the real decision depends on tax brackets, outside cash and time.
4. Estimated payments need a cash plan
The ugly surprise is not always the tax. Sometimes it is the penalty and a scramble for cash.
Clients with business income, investment gains or light withholding may need quarterly estimated payments. The IRS estimated-tax guide explains who may need to pay.
Check withholding and payments before the final quarter closes. Compare the projected balance with safe-harbor targets, then put each payment in the cash forecast.
5. The original opportunity-zone deferral is coming due
Here's why this item can catch someone off guard.
Investors who deferred gains through the original qualified opportunity-zone program generally face income inclusion by Dec. 31, 2026, even if they keep the fund. The IRS opportunity-zone FAQ says deferred gain is recognized on an earlier inclusion event or on that date.
The tax bill does not mean the client should sell the fund. A qualifying investment held long enough may still exclude later appreciation. But the client needs outside cash for tax on the original deferred gain.
Selling investments, harvesting losses or taking retirement money can each create a new tax consequence. Run the full chain before choosing the funding source.
Turn the checklist into assignments
The smartest year-end tax planning file is boring in the best way. It names the decision, owner, documents, cash required and last safe date to act.
Start with opportunity-zone clients because their old deferral has a fixed endpoint. Then review gifts, SALT, retirement moves and estimated payments against the same forecast. Good year-end tax planning keeps one deadline from creating three new problems.
