Taxes · Year-end
Plan. Invest. Thrive.
Last calls before December 31.
Most tax planning happens during the year. But a handful of decisions can only be made — or only matter — in the last 60 days. Here's the list we run through with clients in Q4.
Sell positions trading below cost basis to offset realized gains. Reinvest in a similar (but not identical) position.
- First, offset capital gains dollar for dollar.
- Then, offset up to $3,000 of ordinary income. Excess losses carry forward indefinitely.
- Watch the wash sale rule: can't buy a "substantially identical" security within 30 days before or after the sale.
- Don't let the tax tail wag the dog — only harvest if it fits the plan.
Move pre-tax dollars to Roth, paying tax today at a (hopefully) lower rate than you'd pay later.
- Best window: after retirement, before Social Security and RMDs start.
- Convert through the top of a known bracket — usually 22% or 24%.
- Pay the tax from non-retirement accounts when possible. Otherwise the conversion shrinks.
- Watch IRMAA — Medicare premium surcharges are based on AGI from 2 years prior.
- 5-year rule: converted dollars need to age 5 years before penalty-free withdrawal.
Three smarter ways than writing a check from your checking account.
QCD — Qualified Charitable Distribution70½+ only. Up to $111,000 per person (2026) directly from your IRA to charity. Counts toward RMD. Never enters AGI.
DAF — Donor-Advised FundFront-load several years of giving into one high-income year. Deduct now, grant to charity later.
Appreciated stockGive the stock, not cash. Avoid the capital gains, get the full fair-market deduction.
BunchingCombine two or three years of giving into one to clear the standard deduction in that year.
- If 73 or older: verify the RMD has been taken by December 31.
- If 70½+ and charitable: consider QCD before December 31.
- Max your 401(k): last payroll-period contribution must clear by December 31.
- HSA, IRA: deadline is April 15 of next year — but easy to forget. Note it now.
- Estimated taxes: if you owe Q4 quarterly, due January 15.
- Gifting strategy. $19,000 per recipient annual gift exclusion resets January 1. Use it or lose it.
- FSA spend-down. Schedule appointments, glasses, eligible purchases before deadline.
- 529 contributions. Must be made by December 31 for the current year's Ohio deduction.
- Capital gains realization. If you're in the 0% LTCG bracket, harvest gains, not just losses.
A note from MPM
We run year-end scenarios in October so we have time to act. If you've had a big income year — a sale, bonus, inheritance, or business windfall — tell us as soon as you know. The earlier we see it, the more we can shape.
MPM Wealth Advisors · Plan. Invest. Thrive.
mpmwealth.com · Updated May 2026
Sources: IRS Publication 550 (Investment Income & Expenses); IRS Publications 590-A & 590-B (IRAs); Internal Revenue Code §§ 408A (Roth IRAs), 1211–1212 (capital loss limits), 170 (charitable contributions). Confirm current figures with IRS.gov or tax counsel.