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Year-End Strategies to Reduce Your Tax Bill

Ideally, you have worked to minimize your taxes throughout the year. Here are some year-end strategies that may help further reduce your tax bill. Before implementing these or any year-end strategies, talk with your tax professional.

DEFER OR ACCELERATE INCOME

Project whether you’ll have higher taxable income in 2026 or 2027. If 2027 is higher, consider receiving your employer bonus, investment income, and business income this year.

Do the opposite if, for example, you expect to lose a dependent, have a spouse on leave, or incur business losses, resulting in lower taxable income in 2027.

BUNCH DEDUCTIONS

For instance, if 2026 medical expenses exceed the 7.5% of adjusted gross income (AGI) threshold, squeeze in planned 2026 medical expenses to maximize 2026 tax savings.

Before bunching expenses into 2026, consider your overall tax brackets for this year and 2027. If you expect your income to rise enough in 2027 to push you into a higher bracket, it may make sense to postpone a deduction.

TOP OFF YOUR HEALTH SAVINGS ACCOUNT

You have until April 15, 2027, the tax filing deadline, to make Health Savings Account (HSA) contributions for this year. If you haven’t already maximized your contribution, do so. HSA contributions and earnings are generally excluded from taxable income, and distributions aren’t taxed if used to pay qualified medical expenses. Other requirements apply, including enrollment in a high-deductible health plan.

HSA Contribution Limits For planning purposes, compare the 2026 and the new 2027 inflation-adjusted limits – see table. Additional Catch-Up HSA Contribution limit is for individuals age 55 or older.

REVIEW YOUR CHARITABLE GIVING PROGRAM

Reviewing your 2026 charitable giving effectiveness and potential tax benefits may help minimize 2026 taxes and significantly affect 2027 taxes.

Ensure your 2026 expectations are reasonable given your and the charity’s timelines for change and the nature of the work. Consider how giving more could increase impact and reduce taxes.

Each year, changes affect individuals and small business owners, so it’s important that we conduct your year-end review to ensure you’re on track.

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Tax Strategies for Self-Employed Business Owners

Just as larger corporations do, self-employed business owners, freelancers, and gig workers need to engage in strategic tax planning to minimize liability and maximize savings.

KEEP DETAILED RECORDS

Familiarize yourself with all available deductions, including home office expenses, vehicle mileage, and equipment costs. Maintain thorough records of your expenses throughout the year to substantiate your deductions when filing taxes.

REVIEW YOUR BUSINESS STRUCTURE

Your business—whether you’re a sole proprietor, an LLC, or an S corporation— can significantly affect your tax liability. Each structure has unique tax implications. Talk with your tax professional before the new year to ensure you’re taking advantage of the most beneficial structure.

CONTRIBUTE TO A RETIREMENT PLAN

Contributing to small-business retirement plans, such as Solo 401(k)s, SEP IRAs, or personal IRAs, helps you invest for the future and may offer immediate tax advantages.

PAY ESTIMATED TAXES

If you don’t have taxes withheld from your income, you’ll need to make estimated tax payments to avoid penalties. Monitor your income and expenses throughout the year to determine how much to set aside for quarterly payments.

BE INFORMED

Recent enhancements to bonus depreciation and Section 179 expensing allow you to write off costs in the first year to minimize taxes. Because expensing limits adjust annually for inflation, strategize whether to buy in 2026 or 2027.

If you receive or issue IRS Forms 1099-NEC or 1099- MISC for payments to nonemployees, the reporting threshold rises from $600 to $2,000 in 2026. This amount will adjust for inflation in future years. Reporters will have less work, while form recipients should plan to track and report small fees received.

Connect with your trusted advisor now to create a focused, forward-looking tax strategy that positions you for savings in 2027 and beyond. Act today to ensure you’re prepared for upcoming changes and to maximize every opportunity.

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The Benefits of Financial and Tax Strategies

A well-coordinated financial strategy encompasses more than just your investments. It considers every aspect of your finances, from budgeting to retirement saving, to ensure you’re making decisions that can help you reach all your goals.

THE BIG PICTURE

A successful strategy should provide a complete view of all your finances. By knowing how much savings you have accrued and the debts you owe, you can come up with a roadmap for spending, saving and investing. Identifying your short- and long-term goals is a good place to start. Paying off debt might be a short-term goal, while saving for retirement generally is a long-term goal that could be years in the future. Setting aside money for a child’s education might be a mid-term goal.

WORK TOWARD YOUR GOALS

A cornerstone of your strategy should be the probability of reaching all the milestones you’ve identified. You and your financial professional choose a target asset allocation based on your goals, time frame and risk tolerance. Whether you’re an aggressive or a conservative investor, it’s essential to periodically check your progress toward your goals and adjust your strategy as needed.

YOUR RETIREMENT PICTURE

What you want to do in retirement can be a factor in how much savings you’ll need to accumulate. If you plan to travel, relocate or even start your own business, you’ll need to have sufficient funds for those endeavors. Your financial professional can help you estimate your future financial needs and build the wealth you’ll need to meet them.

MARKET UPS AND DOWNS

Periods of market volatility and high inflation can affect your investments’ performance over the short term. Investors may panic and sell investments when values are down. Historically, markets have always recovered their losses. Your financial professional can help you make investment decisions that aren’t driven by short-term market fluctuations.

HELP WITH TAXES

Taxes can impact your finances both before and during retirement. A tax professional can help you create a tax-efficient estate plan, advise you on charitable donations and explain any tax breaks and deductions that are available to you.