11 Year-End Tax Tips & More: 2026 Update

In past years, the story at year-end was a race against a deadline. This year the law is more settled, which makes the question a different one: not how fast can you move, but how smartly can you use what’s now permanent? The items below are worth addressing before December 31, and many of them call for a conversation with your CPA and financial advisor, which we are glad to join.

Please remember that permanent only means there’s no expiration date written into the law. Congress can change the rules at any time, so build your plan to hold up under more than one outcome and review it every year.

Before we begin, ask your CPA to run a projection of this year's taxes against next year's. That preview tells you whether to accelerate deductions or push income into 2027.

#1 Newcomers: Change Your Domicile to Florida

Establish your homestead. If you moved to Florida this year, you must own and occupy the home as your permanent residence on January 1, then file for the Homestead Exemption by March 1. The exemption cuts your taxable value by roughly $50,000 and starts the Save Our Homes cap, which limits annual assessment increases to 3% or inflation, whichever is lower.

Moving within Florida? Portability lets you carry up to $500,000 of that Save Our Homes savings to a new homestead within three tax years.

Florida voters approved Amendment 3 on November 3 with about 62% of the vote. It raises the non-school homestead exemption to $150,000 in 2027 and $250,000 in 2028, indexed to inflation after that, and the $25,000 school-tax exemption stays the same.

Here is the year-end catch: the larger exemption goes to permanent Florida residents as of December 31, 2026. People who establish residency later receive the current exemption first, and the increased exemption begins in their fifth year of exemption. If you are moving to Florida, establishing your domicile before December 31 matters more than ever. If you are uncertain about what it requires to establish your domicile in Florida, please feel free to ask us for our change of domicile checklist.

Once your domicile is settled, the next question is how you want to share your wealth with family, and the annual exclusion is the simplest place to start.

#2 Annual Exclusion Gifting: Use It or Lose It

The annual gift tax exclusion is $19,000 per recipient in 2026 ($38,000 for a married couple splitting gifts), up from $16,000 in 2022. Gifts above it may require a Form 709 and count against your lifetime exemption. Each year the exclusion resets, so unused gifting capacity is gone on December 31.

The One Big Beautiful Bill Act made the federal estate and gift tax exemption permanent (for now*) and raised it to $15 million per person ($30 million for a married couple) in 2026, with a 40% rate above that.

The scheduled drop to about $7 million after 2025 did not happen. Fewer families now face federal estate tax, so gifting is increasingly about growth outside your estate, income tax planning and helping family now. Florida has no state estate tax, but the federal exemption still matters for larger estates.

The mechanics have not changed:

• Make sure cash and check gifts settle in the recipient's account by December 31. Wire funds, and do not wait for the last week.
• Have an attorney prepare the documents for real property or tangible gifts, and get tangibles appraised.
• You can also pay a child's or grandchild's tuition or medical bills directly to the school or provider, outside the annual exclusion. A Section 529 plan is another option.
• For gifts in trust, give your attorney plenty of time to draft. A Crummey trust lets beneficiaries withdraw the gift, which qualifies it for the annual exclusion, and the withdrawal window should close within the calendar year.
• The generation-skipping transfer (GST) exemption tracks the $15 million figure, so gifts to grandchildren deserve a look.

#3 Charitable Gifts: The Rules Changed on January 1

When it comes to charitable giving, three new rules took effect this year:

• A 0.5% AGI floor for itemizers. Only gifts above 0.5% of your adjusted gross income are deductible. At $200,000 of AGI, the first $1,000 you give each year produces no deduction.
• A 35% cap for top-bracket taxpayers. If you are in the 37% bracket, itemized deductions, including charitable gifts, save tax at 35% rather than 37%.
• A new deduction for non-itemizers. If you take the standard deduction ($16,100 single, $32,200 married in 2026), you can still deduct up to $1,000 ($2,000 for joint filers) of cash gifts to public charities.

The 60% of AGI limit on cash gifts to public charities is now permanent. Appreciated securities carry a lower AGI limit, so confirm yours with your CPA before a large gift.

Bunch your gifts. The floor rewards concentrating several years of giving into one year, so you clear it once and itemize. A larger state and local tax deduction cap ($40,400 in 2026, up from $10,000) also puts more households over the standard deduction. A donor-advised fund (DAF) lets you take the deduction now and recommend grants to your charities over the following years, along with other tax benefits like avoiding capital gains on investments.

Qualified Charitable Distributions. If you are 70½ or older, you can send up to $111,000 in 2026 ($222,000 for a couple, each from their own IRA) straight from your IRA to charity. The amount counts toward your required minimum distribution, never enters your income, and is not touched by the new floor. A one-time QCD of up to $55,000 can also fund a charitable remainder trust or gift annuity. Your custodian must pay the charity directly, and it must be completed by December 31.

Timing. Gifts by check count when mailed, and electronic gifts when initiated, by year-end. Gifts of securities and QCDs take longer, so start in November.

Inherited IRAs. The SECURE Act still requires most non-spouse beneficiaries to empty an inherited IRA within 10 years (with exceptions for minors, disabled and chronically ill beneficiaries).

Charitable gifts don’t happen in a vacuum. They interact with everything else on your return, which is why the next step is to run the numbers.

#4 Income Tax Planning and Pro Forma Returns

The standard rule still applies: accelerate deductions and postpone income, unless you expect to be in a higher tax bracket next year. Run a pro forma return now. Three 2026 items belong in it:

• The standard deduction is $16,100 (single) and $32,200 (married filing jointly).
• The state and local tax (SALT) deduction cap is $40,400, phasing back toward $10,000 at higher incomes, and it reverts to $10,000 in 2030.
• Taxpayers 65 and older may claim an extra $6,000 deduction through 2028, which phases out above $75,000 of income ($150,000 joint).

#5 Max Out Retirement Contributions, and Gift to Heirs Who Can

If you are still working, fund your retirement accounts before year-end. The 2026 limits:

New this year: if you earned more than $150,000 in FICA wages in 2025, your 401(k) catch-up contribution must go into a Roth account. Direct Roth IRA contributions phase out between $153,000 and $168,000 of income for single filers and $242,000 to $252,000 for joint filers. Above that, ask us about a backdoor Roth. IRA contributions for 2026 can be made until the April 2027 filing deadline, but 401(k) deferrals must come out of 2026 paychecks.

You can also gift money so a child or grandchild with earned income can fund their own Roth. Decades of tax-free growth is powerful.

Micro Roth conversions. If your IRA is the largest asset on your balance sheet, converting a modest slice each year (we often start around 5%) spreads the tax over many years and leaves your children a tax-free Roth beside the traditional IRA. Pay the conversion tax from money outside the IRA, and run the numbers with your advisor first.

#6 Required Minimum Distributions

If you must take RMDs, take them by December 31 each year. The starting age is 73 (75 if you were born in 1960 or later), and the first RMD may be delayed until April 1 of the following year. Missing one triggers a penalty, so do not leave it to the last week. If you are charitably inclined, a QCD (Tip #3) can satisfy the RMD without adding to your income.

#7 Loss Harvesting

Sell losing investments to offset realized gains and avoid tax on them. If you want to keep the position, avoid the wash sale rule by waiting 31 days to repurchase the same security, or buy a similar but not identical investment. Check mutual funds before year-end: many pay capital gain distributions in November and December.

#8 Interest Rates Have Flipped the Playbook

In 2022 we urged clients to move fast on low rates, low valuations and a looming exemption cut. None of those conditions holds today. The IRS Section 7520 rate is 5.6% for October 2026, compared with 0.4% in October 2020 and 4.6% a year ago, and the exemption is permanent at $15 million per person.

Higher rates make some strategies less attractive. Grantor retained annuity trusts, intrafamily loans and charitable lead trusts work best when rates are low. Qualified personal residence trusts and charitable remainder trusts tend to work better as rates rise. The point of gifting now is still to move growth out of your estate, but the decision turns on your numbers rather than a deadline, so we model each technique before recommending one.

#9 Life Insurance Administration

Confirm that premiums are paid and that the policy is funded well enough to stay in force. Ask your agent for an in-force illustration at least every other year. If a policy is held outside your estate, the death benefit can also pass free of estate tax. A hybrid policy that adds long-term care coverage is worth a look, since several years of memory care in Naples can cost well over $1 million.

#10 Have You Administered Your Trusts Properly?

If you have an irrevocable trust, confirm that required distributions happen before year-end. Distributing income to beneficiaries can move it from the trust's compressed brackets to the beneficiary's lower rate. Trusts may treat distributions made within 65 days after year-end as made in the prior year, but that election is technical, so discuss it with your tax advisor.

#11 Miscellaneous Year-End Observations

Social Security. The Social Security Administration announced a 3.6% cost-of-living increase for 2027, the largest since 2023, averaging about $75 more per month for retirees. The maximum earnings subject to Social Security tax rises to $192,300.

Net investment income tax. Planning for the 3.8% surtax is beyond this article, so discuss it with your CPA.

Opportunity Zones. The program is now permanent. Investments made through December 31, 2026 follow the original rules, while a new program starts January 1, 2027, with new zone designations, a rolling five-year deferral and a 10% basis step-up (30% for rural zones). If you have a capital gain from 2026, you generally have 180 days to roll it into a fund, so the timing question is whether to invest this year or wait for the 2027 rules. Ask us or your CPA before you decide.

None of these items needs to be tackled alone, and November is the right time to start, since gifts, QCDs and trust documents all take time. If you have questions about any of them, email us for a short consultation and we will help you sort out which ones matter most for your situation.