Looking at what has changed this year can help us understand which tax considerations deserve attention, and how they fit the life we’re building.
By the time the year begins to draw to a close, life may look a little different from the way it did in January. Your income may have changed, family responsibilities may have grown, or something you once imagined for the future may now feel much closer.
Alongside those changes, there may be financial decisions worth revisiting. Perhaps you have more room to save, a wish to support someone you love, or questions about how your investments and retirement accounts fit together.
At Amida, we see a year-end review as an opportunity to bring these pieces into view. Understanding what has changed in your life gives the financial conversation a meaningful place to begin.
Timing is part of that conversation. Many actions affecting the current tax year need to happen by December 31, and a filing extension generally doesn’t extend those deadlines. Other opportunities, including eligible IRA and health savings account contributions, usually remain available until the tax-filing deadline. Your advisor and tax professional can help distinguish what needs attention before year-end from what has more time. [IRS IRA guidance, HSA guidance]
Making space for the years ahead
The amount you’re comfortable setting aside can change as your life changes. As the year closes, it may be helpful to consider whether your retirement contributions still reflect both your future intentions and your present responsibilities.
Pre-tax contributions to a workplace retirement account, such as a 401(k) or 403(b), generally reduce current taxable income. If there is room within the contribution limit and your allocation, there may be an opportunity to contribute more through your remaining paychecks.
Additional contributions, known as catch-up contributions, may be available depending on your age and plan. Their tax treatment also deserves attention: some higher earners are required to make these contributions on a Roth basis beginning in 2026, so they won’t provide a current income-tax reduction. The limits and rules are something your advisor and plan administrator can help you understand. [IRS catch-up contribution guidance]
A health savings account may also belong in this conversation if you meet the eligibility requirements. Together, these considerations invite a practical question: how much can you comfortably set aside while continuing to care for the commitments you have today?
Looking beyond the investment total
When you look at an investment account, its value may be the first thing you notice. There can also be tax considerations within the account that deserve a closer look.
In a taxable account, selling an investment for less than its cost can create a loss that may offset capital gains and, within limits, other income. This is called tax-loss harvesting. Whether it is useful depends on your circumstances, and replacement purchases need care because the wash-sale rule can disallow the loss deduction. [IRS investment guidance]
Mutual fund distributions are another part of the picture. A fund can distribute capital gains that are taxable to you even when you haven’t sold your shares, or when the fund’s value has fallen during the year. An upcoming distribution can also affect the timing of a new purchase in a taxable account. [SEC guide to mutual funds]
These are useful subjects to bring to your advisor, who can consider the tax implications alongside the reasons you hold an investment and the role it plays in your wider financial life.
When income changes from one year to the next
A year with a different level of income can open questions about timing. Where there is flexibility, recognizing income sooner or later may affect the tax you pay, depending on your circumstances in each year.
A lower-income year may also be a reason to explore a Roth conversion. This involves moving money from an eligible retirement account into a Roth account, with the taxable portion included in income for the year of the conversion. It creates a current tax obligation, so the decision deserves a careful look at both the immediate cost and the longer-term implications. [IRS Roth conversion guidance]
The timing of deductions can be relevant, too. Bringing eligible deductible expenses together in one year, sometimes called “bunching,” may make itemizing more useful than taking the standard deduction, which is the set deduction available based on your filing circumstances.
For 2026, changes include a minimum threshold for itemized charitable deductions and a limitation on the value of itemized deductions for people in the highest tax bracket. These changes can affect whether an approach used previously still serves you well. The calculation belongs with your tax professional; the starting point is recognizing that this year may deserve a fresh look. [Charitable deduction rules, itemized deduction limitation]
Bringing retirement withdrawals into the conversation
As retirement unfolds, the way you draw on your accounts becomes part of how you support your life.
Certain retirement accounts require minimum annual withdrawals, known as required minimum distributions or RMDs. Once these requirements apply, the withdrawals must be taken by the applicable deadline. December 31 is generally the annual deadline, although a first-year exception may allow a later date. Using that exception can result in two required distributions falling within the following calendar year.
A missed or insufficient distribution can lead to a tax penalty, which makes confirming the requirement a useful part of your year-end conversation.
If charitable giving is important to you, a qualified charitable distribution may also be relevant. For eligible IRA owners, a qualifying payment made directly to an eligible charity can count toward an RMD and be excluded from income, subject to the applicable rules and limits. Your advisor and tax professional can help you explore whether this fits your intentions. [IRS retirement distribution guidance]
Giving in a way that reflects your intentions
You may already know whom you would like to support and what you hope your generosity will make possible. Understanding the timing and form of a gift can help you carry those intentions forward.
For family gifts, the annual gift-tax exclusion allows qualifying gifts up to a specified amount per recipient each calendar year. Unused annual exclusion amounts don’t carry forward, although the reporting requirements depend on the circumstances. Eligible tuition or medical expenses paid directly to the institution or provider can fall outside that annual exclusion. [IRS gift-tax guidance, Form 709 instructions]
Charitable gifts bring a different set of considerations. The timing of a donation, the asset you give and the approach you use, including a donor-advised fund or a gift of appreciated stock, can affect its tax treatment. These choices are best considered alongside your intentions for giving and the relevant deduction rules. [IRS charitable contribution guidance]
Beginning with whom or what you want to support allows the technical conversation to follow your purpose.
A few quieter details
Some year-end considerations sit within the accounts and arrangements we use throughout the year.
A health flexible spending account may have funds that need to be used within a particular period. These accounts generally operate on a use-it-or-lose-it basis, although some plans allow a limited carryover or grace period. Your own plan’s terms determine what remains available and for how long. [IRS flexible spending account guidance]
If you’re contributing toward someone’s education through a 529 account, there may also be a state tax benefit to consider. Eligibility and contribution deadlines depend on the relevant state rules.
Withholding, the tax taken from your pay or other income, is another useful part of the review, especially if your income has changed. Too little paid during the year can lead to an underpayment penalty. Your tax professional can assess whether an adjustment is appropriate and explain how its timing affects your position. [IRS withholding guidance]
Beginning with your own questions
A year-end decision can have consequences beyond the return you’ll file next spring. A tax reduction today may affect a future obligation, while a decision to recognize more income now may influence other parts of your financial picture.
Looking at those connections together can help you understand which opportunities are relevant and which can comfortably be left aside. You don’t need to arrive at that conversation with the answers. A few questions may be enough:
- What has changed in my life this year that we should consider?
- Are there any requirements or opportunities that need attention before December 31?
- How would a decision we make now affect the years ahead?
At Amida, we invite you to bring these questions, and any others the year has raised, into a conversation with us. Together with your qualified tax professional, we can explore how the financial considerations fit your responsibilities, your intentions and the life you’re building. The first step is easy… connect with us.
