Year-end tax planning: 5 moves advisors should review with clients

• Key insight: Year-end tax planning is about more than Dec. 31; advisors should consider multi-year tax implications.
• What’s at stake: Missing key year-end planning opportunities can mean higher tax bills or unexpected liabilities, particularly for investors in the original opportunity zone program facing a deadline to realize capital gains. The timing of charitable gifts also matters; a new floor on itemized charitable deductions took effect in 2026.
• Expert quote: “The key takeaway here is if you have something that you could donate this year or next year, choose to donate it this year for sure.” — Richard Lavina, CEO of Taxfyle 

With the end of the year fast approaching, financial advisors have a narrowing window to help clients manage tax bills, from timing charitable gifts and income to harvesting tax-losses and preparing for a deadline facing investors in the original opportunity zone program. 

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But the best tax strategies aren’t necessarily confined to a single year. Advisors who look beyond Dec. 31 can help clients plan across multiple tax years, said Joseph Medina, a Washington-based partner at EY Private.

“We’re slowly going to need to move into a world where we are not thinking about year-end planning, but we’re thinking about multi-year planning,” he said.

That means considering when income will be received and when deductible expenses can be claimed. Business owners and other clients may have some control over that timing, Medina said, whether they are deciding when to exercise options, buy equipment or take other steps that affect their tax bills.

In the near term, several tax-related decisions warrant attention before Dec. 31. Here are five areas advisors should review with clients.

Charitable contributions

Charitable contributions can offer tax benefits even to clients who do not itemize deductions. The One Big Beautiful Bill Act (OBBBA) created an above-the-line deduction for charitable contributions worth up to $1,000 for individual taxpayers or $2,000 for married couples filing jointly.

Clients who do itemize might also benefit from bunching charitable donations into one tax year, either by giving directly to charities or contributing via donor-advised funds.

Starting with 2026 income, itemized charitable deductions will be subject to a floor equal to 0.5% of adjusted gross income, said Richard Lavina, co-founder and CEO of Taxfyle, a tax software company serving financial advisors and tax professionals.

The change was enacted as part of the OBBBA and makes the timing of donations especially important this year, Lavina said.

“This is the year, then, to get all your charitable contributions [done],” he said. “The key takeaway here is if you have something that you could donate this year or next year, choose to donate it this year for sure.”

The floor is not the only limit to keep in mind. Itemized deductions are also subject to a separate reduction: 2/37 of the deductions are disallowed, Medina said.

“[It] first has to get above the floor, and then it gets reduced by the lid,” he said.

READ MORE: How non-grantor trusts maximize charitable, small business stock tax advantages

SALT deduction and income timing strategies

The state and local tax (SALT) deduction is generally capped at $40,400 for 2026, making income management key for high earners.

For clients near the top of the phase-down threshold, advisors should manage income timing, Lavina said. 

“Business owners should use their pass-through entities’ election because that avoids the cap entirely,” he said. 

That election, available in some states, allows businesses to pay state income taxes at the entity level, rather than having owners pay them individually.

Timing income, such as bonuses, matters beyond managing the SALT deduction. Clients who  “have any control over when those are paid” may be able to manage the effect on their tax rate by deciding whether payments arrive in December or January, said AJ Kletkin, a New York City-based private wealth advisor at Private Advisor Group.

READ MORE: Where OBBBA delivers the biggest tax cuts

Contributions to retirement, education accounts

Year-end is also a chance to review contributions to Section 530A accounts, also known as Trump accounts, for children; 529 education savings plans; and clients’ own individual retirement accounts and 401(k) plans. Advisors should also check whether eligible clients age 50 and older can make catch-up contributions. Under the SECURE 2.0 Act, all 401(k) catch-up contributions must be made as Roth deferrals.

Not all contributions must be completed by Dec. 31. Sole proprietors with solo 401(k) plans, for example, can wait until they file their tax returns to contribute.

Clients also might want to convert traditional IRA assets to a Roth IRA. Adam Bergman, founder of Sioux Falls, South Dakota-based IRA Financial, said he looks for room between a client’s current income and the top of their tax bracket to add to income without pushing them into a higher bracket.

READ MORE: Advisors rethink Roth IRA conversions after the OBBBA

Estimated tax payments

Advisors should make sure clients are prepared to make quarterly estimated tax payments, said Brian Large, a partner at New York City-based financial planning firm Lenox Advisors.

“A lot of folks don’t do it, and they should, and they get surprised at the end of the year with a pretty big number and some penalty on that because they haven’t been doing it,” he said. 

Checking that a client’s budget can accommodate estimated payments can help prevent unexpected tax bills and cash-flow issues. 

“You build it into your budgeting … so when that bill comes, I already have the money. I’m not trying to figure out where I get the money from,” Large said.

READ MORE: IRS updates withholding tax calculator for new tax breaks

Original opportunity zone investments

Investors in the original opportunity zone program face a Dec. 31 deadline to realize their capital gains. Investments in the new version of the program can begin in January 2027. 

The approaching deadline has “snuck up on some” clients, Bergman said. A few have told him they might need to withdraw funds from their IRAs to pay the resulting tax bill.

“Some people [weren’t] properly prepared for the fact that this thing was coming,” he said. “Time kind of goes pretty quick, and you wake up one day, and you’re like, ‘Oh no. It’s October 2026.'”

Advisors who need to address clients’ gains have various strategies to consider. Bergman said he has seen clients generate capital losses or invest in master limited partnerships in the oil and gas sector to get tax deductions.

Vivek Chandrasekhar, a former tax counsel for the U.S. Department of the Treasury and now a partner at global law firm Ashurst Perkins Coie, suggested offsetting the gains with losses from other investments, if available.

But realizing gains doesn’t necessarily mean selling the underlying investment. 

“The fact that there’s gain does not mean you should sell the investment,” he added. “You’ll generally want to keep the investment for 10 years to get the benefit of excluding any kind of additional gain, to the extent the investment has performed well.”