I'm a Tax Professional: 6 Moves for Q4 That Pay Off in April
Most people first think about their yearly tax bill in April, long after they can do anything about it.
"The best time to fix an April tax bill is October," said Tiffany Nellums, EA and tax principal at Nexera Tax. "By the time your W-2 shows up, most of your options are gone."
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Grab a notebook. Nellums and two other experts are sharing the six tax moves worth making before Dec. 31 to help you get ahead of your bill.
1. Run a Projection Before Anything Else
Nellums said to pull your latest pay stub and last year's return, then estimate where 2026 is landing. Factors that can cause April surprises are side gigs, bonuses, job changes and investment sales, so don't forget to add them.
Mark Clark, CFP, founder and financial advisor at Prestige Advisors, builds his whole year-end plan around that forecast. Once you know your year-to-date income, you can see how much room is left in your current tax bracket. That leftover space may be a good spot for a partial Roth conversion or an extra IRA withdrawal.
2. Catch Up Through Your Paycheck
If the projection shows you're behind, Nellums recommended filing a new Form W-4 to boost withholding on your last few paychecks. The IRS generally treats withholding as if it were paid evenly through the year, so it can shrink an underpayment penalty in a way a December estimated payment can't. Freelancers and business owners should also mark Jan. 15, 2027, on the calendar, when the fourth-quarter estimated payment is due.
3. Max Out Workplace Plans by Dec. 31
The 2026 401(k) limit is $24,500. IRAs can be funded until the April filing deadline, but 401(k) money has to come out of a 2026 paycheck. Clark also suggested topping off HSA contributions while there's time.
Higher earners 50 and older face a new wrinkle this year. Their catch-up contributions may now have to go in as Roth, so Nellums advised checking with HR before the last paychecks of the year.
4. Harvest Losses Carefully
Clark recommended reviewing taxable investment accounts for losses that could offset gains. Keep the wash-sale rule in mind, since buying the same or a substantially identical investment within 30 days before or after the sale wipes out the deduction.
5. Rethink How You Give
New rules change the math on charity. Starting this year, people who take the standard deduction can deduct up to $1,000 in cash gifts to qualified charities or $2,000 for married couples filing jointly, Nellums said. Itemizers now only deduct giving above 0.5% of their adjusted gross income.
That floor makes timing matter more for itemizers. Clark suggested grouping two years of gifts into one or giving directly from an IRA after age 70 1/2. Keep receipts no matter which route you choose.
6. Business Owners Should Look at Section 179
Small-business owners who bought equipment this year may qualify for Section 179, according to Cameron Botes, founder and tax advisor at BizBud. It lets a business deduct the full cost of qualifying property in the year it's bought and placed into service, rather than spreading the write-off over several years. Real estate doesn't qualify.
In his example, a photography business that earns $100,000 and buys a $10,000 camera would owe tax on $90,000 instead. Even some leased assets "may qualify," depending on how the business is structured, Botes said. He said clients to raise purchases with their accountant early, since the equipment has to be in service by year-end to count for 2026.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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