Optimizing 2026 tax liabilities requires proactive year-end adjustments to retirement contributions, asset location, and charitable strategies. Maximizing pre-tax contributions to 401(k)s or IRAs reduces current taxable income, while tax-loss harvesting in taxable brokerage accounts offsets capital gains, provided investors strictly navigate the 61-day wash sale rule. Strategic asset location—placing income-heavy investments like bonds and REITs in traditional IRAs—prevents annual taxation on ordinary income. For those charitably inclined, donating appreciated stock or utilizing donor-advised funds provides greater tax efficiency than cash donations. Furthermore, adjusting withholding or estimated payments ensures compliance with IRS safe harbor rules, preventing underpayment penalties. Finally, evaluating marginal tax brackets before year-end determines the viability of Roth conversions, which offer long-term tax-free growth. Motley Fool colleague Amanda Kish provides these insights to help investors finalize their financial planning before the December 31st deadline.
Sign in to continue reading, translating and more.
Open full episode in Podwise