The Year-End Financial Review: Protect Your 2026 Finances

December isn’t just office parties and Secret Santa gifts. It’s also the perfect moment to make financial moves that save you real money. Use the last few weeks of the year to reduce your tax bill and clean up your books before they cause headaches later.

Here’s what you can still do before December 31 to set yourself up for a stronger 2026. 

• Maximize Retirement Contributions

Retirement contributions reduce taxable income while building long-term wealth. For individuals, this includes IRAs, Roth IRAs, employer plans, and – for the self-employed – SEP IRAs or Solo 401(k)s. Business owners should calculate profit-sharing early or assess whether a defined benefit plan offers a substantial deduction for high-income years.  You can still contribute to SEP-IRAs and solo 401ks so long as they are established before the tax filing deadline.

•  Defer Income, Accelerate Deductions

Strategic timing can significantly reduce current-year tax liability. Individuals and businesses can defer bonuses or invoices into the next year, prepay deductible expenses like rent or supplies, or purchase needed assets to begin depreciation sooner.

•  Recharacterize Income

If you are entering a semi-retirement role within a company that is closing or has been sold and they want to keep you on to aid the transition, ask if they can pay you as a consultant.  This opens the door to many business deductions that are not available to you as an employee.

• Tax-Loss Harvesting

Selling underperforming investments to offset capital gains is one of the simplest ways to reduce taxable income. Losses can be harvested and reinvested into similar assets without violating wash-sale rules.

• Evaluate Business Structure

As the year draws to a close, business owners should assess whether their entity structure remains optimal.  Many single-member LLCs can benefit from changing their corporate structure to a Sub S, which provides a more favorable tax environment.

• Evaluate Business Credits

Many business owners are unaware of the tax credits available to them by providing benefits to their employees.  They should assess their eligibility for various credits, including energy-saving incentives, R&D credits, work opportunity benefits, and small-business healthcare credits. Ensuring that accountable plans are correctly implemented can also facilitate tax-free reimbursements.

• Capital Purchases and Section 179

If the business needs equipment, vehicles, or technology, purchasing before year-end could unlock significant tax breaks through Section 179 and bonus depreciation.

Book your year-end financial review now and start 2026 with lower taxes and cleaner books.  And have a great holiday season!