By Harry Prabandham · Updated September 27, 2026
Tax Planning
Tax Planning Beyond April: Decisions to Make During the Year
Most tax-saving moves must happen by December 31. Planning during the year around income timing, gains, giving, and estimated tax keeps options open.
Tax Planning Beyond April: Decisions to Make During the Year
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What is year-round tax planning?
- It means projecting this year's tax before the year ends, while decisions about income, gains, and deductions can still change the result.
- Filing season only records what already happened, and most levers close on December 31.
- Projections matter most in years with RSU vests, option exercises, a tender offer, a job change, or retirement.
- The aim is fewer surprises and better-timed decisions; a lower bill is possible but not promised.
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What is year-round tax planning?
- It means projecting this year's tax before the year ends, while decisions about income, gains, and deductions can still change the result.
- Filing season only records what already happened, and most levers close on December 31.
- Projections matter most in years with RSU vests, option exercises, a tender offer, a job change, or retirement.
- The aim is fewer surprises and better-timed decisions; a lower bill is possible but not promised.
Deadlines that shape the calendar
- Federal estimated payments for 2026 are due April 15, June 15, and September 15, 2026, and January 15, 2027.
- Roth conversions, loss harvesting, and charitable gifts count for 2026 only if completed by December 31.
- IRA and HSA contributions for 2026 can be made until the April 2027 filing deadline.
- 401(k) deferrals must run through payroll by year-end; the 2026 employee limit is $24,500, plus catch-up if eligible.
How can underpayment penalties be avoided?
- Paying 100% of last year's tax, or 90% of this year's, through withholding and estimates generally avoids the penalty.
- If last year's AGI exceeded $150,000 ($75,000 married filing separately), the prior-year safe harbor rises to 110%.
- Supplemental wage withholding on RSUs is often a flat 22% below $1 million, which can fall short for high earners.
- Withholding counts as paid evenly through the year, so a late-year increase can cover an earlier shortfall.
Which levers can shift the bill?
- Timing income: spreading option exercises, RSU sales, or bonuses across years can soften bracket jumps.
- Harvesting losses to offset gains, while respecting the 30-day wash-sale rule across all your accounts, including IRAs.
- Realizing gains in low-income years, when long-term gains may fall in the 0% or 15% bracket.
- Converting pre-tax IRA money to a Roth in years with room in a lower bracket.
What changed for 2026 deductions?
- The state and local tax deduction cap is $40,400 for 2026, reduced toward $10,000 when MAGI exceeds $505,000.
- Itemizers can deduct charitable gifts only above 0.5% of AGI, while non-itemizers get up to $1,000 ($2,000 joint) for cash gifts.
- For top-bracket taxpayers, itemized deductions are capped at a 35% tax benefit starting in 2026.
- These changes can make bunching several years of gifts into one year, often via a donor-advised fund, worth modeling.
Coordinating the team
- The CPA who prepares the return and whoever manages investments or equity decisions, working from one shared projection.
- Sharing grant schedules, expected vests, and planned sales early helps avoid moves that work against each other.
- A mid-year check-in and another in early fall leave time to act before year-end.
Key takeaways
- Most tax levers close December 31, so projecting early keeps them available.
- Safe harbors make estimated payments manageable, especially in equity-heavy years.
- 2026 brings a $40,400 SALT cap with phase-downs, a 0.5% charitable floor, and a 35% cap on itemized deduction value for top earners.
- Coordinate decisions with a CPA; Rubric does not prepare tax returns.
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