December 31 is the real tax deadline for most of the moves that lower your bill. By the time you file in 2027, it is too late to defer more pay, harvest losses or time a gift. This year-end tax planning checklist for 2026 covers what to do in October, November and December, updated for the One Big Beautiful Bill Act's new charitable rules and deductions, the 2026 contribution limits, and the Virginia-specific moves Fredericksburg-area households often miss.
Key takeaways
- 2026 limits: $24,500 for 401(k)/403(b)/TSP (up to $35,750 with catch-ups), $7,500 for IRAs, and $4,400 / $8,750 for HSAs.
- New for 2026: non-itemizers can deduct up to $1,000 ($2,000 joint) of cash gifts, while itemizers lose the first 0.5% of AGI in gifts. That changes the bunching math.
- Required minimum distributions, Roth conversions, 401(k) deferrals and most gifts must be finished by December 31. IRA and HSA contributions can wait until April 15, 2027.
- Virginia lets you deduct up to $4,000 per Virginia529 account for 2026, but it does not follow federal bonus depreciation.
Why year-end 2026 is different
2026 is the first year several new rules apply at once. The SALT cap is now $40,400, so many homeowners who took the standard deduction for years may itemize again. The new tips, overtime, senior and car-loan deductions all have income phase-outs, which means moves that raise your income (a Roth conversion, a big capital gain) can quietly shrink them. And the charitable deduction rules changed for everyone. Our overview of the 2026 tax law changes explains each new provision in detail.
Before you act on anything below, run a quick projection: estimate your 2026 income, deductions and withholding. Our 2026 tax bracket calculator gives you a fast federal estimate, and the IRS Tax Withholding Estimator shows whether to adjust your W-4 for the last few paychecks.
Your October–December action timeline
Max out retirement accounts and your HSA
Workplace plan deferrals must come out of 2026 paychecks, so if you want to contribute more, tell payroll now. Federal employees at Quantico, Dahlgren or Fort A.P. Hill can change TSP elections online; give it a pay period or two to take effect.
| Account | 2026 limit | Catch-up | Deadline |
|---|---|---|---|
| 401(k), 403(b), governmental 457, TSP | $24,500 | +$8,000 at 50+; +$11,250 at ages 60–63 | Dec 31, 2026 (payroll) |
| SIMPLE IRA | $17,000 | +$4,000 at 50+; +$5,250 at ages 60–63 | Dec 31, 2026 (payroll) |
| Traditional or Roth IRA | $7,500 | +$1,100 at 50+ | Apr 15, 2027 |
| HSA | $4,400 self-only / $8,750 family | +$1,000 at 55+ | Apr 15, 2027 |
| Health FSA (salary reduction) | $3,400 | Carryover up to $680 if your plan allows | Plan rules |
| Dependent care FSA | $7,500 (up from $5,000) | $3,750 if married filing separately | Plan year |
Two more HSA points for 2026: bronze and catastrophic Marketplace plans now count as HSA-eligible, and you can use HSA money to pay direct primary care fees. If you changed plans this year, confirm you were eligible for the months you plan to contribute.
Harvest losses (and maybe gains)
Look at your taxable brokerage accounts in November, before the December rush.
- Tax-loss harvesting. Selling investments at a loss offsets capital gains, plus up to $3,000 of ordinary income ($1,500 married filing separately). Unused losses carry forward. Avoid the wash-sale rule: do not buy the same or a substantially identical investment within 30 days before or after the sale, including in an IRA.
- Gain harvesting. For 2026, long-term gains are taxed at 0% federally while taxable income stays at or under $49,450 single or $98,900 married filing jointly. Retirees and families in a low-income year can sell winners and rebuy them to reset the cost basis.
- Remember Virginia. Virginia taxes capital gains as ordinary income, at up to 5.75%. A “0% gain” federally still costs Virginia tax.
- Mutual fund distributions. Many funds announce year-end capital gain distributions in November. Buying just before a distribution can hand you a tax bill on gains you did not earn.
Have a question about your situation?
Our team can look at your numbers and tell you exactly where you stand — in person in Fredericksburg or remotely from anywhere.
Charitable giving under the 2026 rules
For 2026, how you give matters as much as how much you give.
The new deduction for non-itemizers makes bunching (giving two years' worth of donations in one year, often through a donor-advised fund) less attractive for moderate givers. Run the numbers before you act.
More giving tips for December:
- Give appreciated stock held over a year instead of cash if you itemize: you deduct its value and never pay tax on the gain.
- Get a written acknowledgment for any single gift of $250 or more, and keep bank records for every cash gift.
- Gifts charged to a credit card by December 31 count for 2026, even if you pay the card in January.
- Gifts to family are not deductible, but you can give up to $19,000 per person in 2026 without filing a gift tax return.
Retirees: RMDs, QCDs and Roth conversions
If you are 73 or older, take your 2026 required minimum distribution by December 31. (If you turned 73 in 2026, you can wait until April 1, 2027, but then you take two RMDs in 2027.) Missing an RMD costs a 25% excise tax, cut to 10% if you fix it within two years.
If you are at least 70½ and give to charity, a qualified charitable distribution (QCD) is usually better than writing a check. The IRA custodian sends up to $111,000 straight to the charity in 2026, it counts toward your RMD, and it never shows up in your AGI. A lower AGI can preserve more of the new $6,000 senior deduction, which shrinks by 6% of modified AGI above $75,000 ($150,000 joint), and can reduce how much of your Social Security is taxed.
Roth conversions must be completed by December 31. They make sense in a lower-income year, but every converted dollar raises your AGI. Watch the side effects: a smaller senior deduction, more taxable Social Security, higher Medicare premiums two years later, and possibly a lost 0% capital gains rate.
Business owners and the self-employed
- Equipment and vehicles. To deduct a purchase for 2026, it must be placed in service (installed and ready to use) by December 31, not just ordered. For 2026, Section 179 allows up to $2,560,000 of expensing, with a $32,000 limit for certain heavy SUVs, and 100% bonus depreciation is permanent for property acquired after January 19, 2025.
- Mileage logs. The business standard mileage rate is 72.5 cents per mile for January through June 2026 and 76 cents from July 1. Make sure your log separates the two halves.
- 1099 prep. Collect W-9s now. For payments made in 2026, you file Form 1099-NEC only for contractors paid $2,000 or more (up from $600).
- Retirement plans. If you want a solo 401(k) or other plan for 2026, talk to us before year-end; deadlines differ by plan type.
- S corporation owners. Run a final payroll that reflects a reasonable salary and includes any health insurance premiums the company paid for you.
- Estimated payments. Your last 2026 federal and Virginia payments are due January 15, 2027.
See our full list of 2026 small business tax deductions for more ideas.
Virginia-specific year-end moves
For the bigger picture on how Virginia taxes your income, see our Virginia state income tax guide.
The 2026 year-end checklist
- Run a 2026 tax projection and adjust your W-4 if needed.
- Increase 401(k), 403(b) or TSP deferrals to reach your target by the last paycheck.
- Spend down any health FSA balance your plan will not carry over.
- Elect 2027 benefits, including HSA and the $7,500 dependent care FSA.
- Harvest losses (and possibly 0% gains) in taxable accounts.
- Decide whether to itemize or take the standard deduction, then plan gifts to match.
- Take RMDs and make QCDs if you are 73 or older (QCDs from 70½).
- Complete any Roth conversion after checking its effect on your deductions.
- Place business equipment in service and collect W-9s from contractors.
- Make Virginia529 and ABLEnow contributions.
- Calendar January 15, 2027 for final estimated payments.
Want a second set of eyes before December 31? Our tax planning service in Fredericksburg runs the projection with you, and our 2026–2027 deadline calendar keeps the next steps on track.
Frequently asked questions
What is the 401(k) contribution limit for 2026?
Employees can defer $24,500 into a 401(k), 403(b), governmental 457 plan or the TSP for 2026. Those 50 and older can add $8,000 (total $32,500), and those aged 60 to 63 can add $11,250 instead (total $35,750). Deferrals must come out of 2026 paychecks.
Can I still deduct charitable donations if I take the standard deduction in 2026?
Yes. Starting in 2026, non-itemizers can deduct up to $1,000 ($2,000 married filing jointly) of cash gifts to qualifying charities. Gifts to donor-advised funds and private foundations do not qualify.
What is the new 0.5% floor on charitable deductions?
Starting in 2026, itemizers can deduct only the part of their charitable gifts that exceeds 0.5% of AGI. With $200,000 of AGI, the first $1,000 of gifts produces no deduction that year, although the disallowed amount can be added to a charitable carryover.
Is charitable bunching still worth it in 2026?
It depends on how much you give. The new $1,000/$2,000 deduction for non-itemizers makes bunching less valuable for moderate givers. Bunching pays off mainly when two or more years of gifts push you well above the standard deduction. Run both scenarios before you write the check.
Can I still make an IRA or HSA contribution for 2026 after December 31?
Yes. IRA and HSA contributions for 2026 can be made until the April 15, 2027 filing deadline. 401(k) deferrals, RMDs, qualified charitable distributions, Roth conversions and most gifts must be completed by December 31, 2026.
Does Virginia let me deduct 529 contributions?
Yes. Virginia lets you deduct up to $4,000 per Virginia529 account per year, with any excess carried forward to future years. Taxpayers 70 or older can deduct the full amount contributed. The contribution must be made during the tax year you claim it.
Want a professional to handle it?
Book an appointment with Timeless Tax & Accounting. We prepare federal and state returns for individuals, families, businesses and corporations across Virginia and in other states, in English or Arabic.
Written by the Timeless Tax & Accounting teamTimeless Tax & Accounting was founded in 2020 by Nagham Alobaidi and serves clients across Virginia and in other states, in English and Arabic. Reviewed for accuracy against IRS and Virginia Tax guidance as of October 2, 2026.
Sources
- IRS — 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500
- IRS — Notice 2025-67 (2026 retirement plan limits, QCD limit)
- IRS — Rev. Proc. 2025-19 (2026 HSA limits)
- IRS — Rev. Proc. 2025-32 (2026 inflation adjustments)
- IRS — 2026 Form 1040-ES (charitable deduction changes for 2026)
- IRS — One, Big, Beautiful Bill provisions (charitable deduction for non-itemizers, HSA changes)
- IRS — Required minimum distributions FAQs
- IRS — Standard mileage rates
- Virginia Tax — Deductions (Virginia529, ABLEnow, educator expenses)
- Virginia Tax — 2026 Form 760ES
- Virginia Tax — Tax Bulletin 26-1 (conformity, bonus depreciation)
This page is general information, not tax, legal or financial advice for your specific situation. Tax rules change often — talk with a professional before acting.
