The last two months of the year are when the decisions that affect next year's taxes, estate exposure, and investment picture get made. Or don't.
There's a version of year-end financial planning that's mostly a checklist: maximize the 401(k), write some checks to charity, maybe harvest a loss or two. That version is better than nothing.
There's also a version that's more deliberate — that takes a full view of the tax picture, the estate exposure, the investment strategy, and the specific numbers that matter for this year — and uses October and November to make moves that simply aren't available in January.
Here's what we're actually talking to clients about right now, and why each one matters.
Move 1: Tax-Loss Harvesting and Portfolio Review
If your taxable investment accounts have positions that are currently worth less than what you paid for them, the end of the year is the time to consider realizing those losses. Tax-loss harvesting — selling positions at a loss to offset capital gains elsewhere in the portfolio — can reduce your tax liability for the year without requiring a fundamental change to your investment strategy, though the actual benefit depends on your full tax picture and the specific positions involved.
The mechanics: losses offset gains dollar for dollar. If losses exceed gains, up to $3,000 of net losses can be deducted against ordinary income, with the remainder carried forward to future years. The key discipline is the wash-sale rule: you cannot buy back the same or substantially identical security within 30 days before or after the sale. Replacing a sold position with a similar but not identical fund can maintain broad market exposure while capturing the loss — though the new position will behave differently, and transaction costs and market movement between trades are real considerations.
This is also a good time for a broader portfolio review — not to react to market conditions, but to make sure the allocation still reflects your actual goals and risk tolerance. Positions that have grown disproportionately may warrant trimming. Rebalancing in a taxable account should be done with an eye on the tax implications, which is another reason to do this in November rather than January.
Move 2: Roth Conversion Assessment
A Roth conversion — moving money from a traditional IRA or 401(k) to a Roth IRA — is taxable in the year it's done, but the converted balance grows and withdraws tax-free thereafter. The strategic question is whether this year's tax rate is likely to be lower than future years' rates. For clients with large pre-tax balances and an expectation of higher income in retirement, the math often points toward converting — though the right answer depends on your full tax picture, account eligibility, plan rules, and timing.
The TCJA tax brackets are now permanent following the One Big Beautiful Bill Act. The 2026 rates for married filing jointly are:
2027 Federal Income Tax Brackets — Married Filing Jointly
| Rate | Taxable Income (MFJ) |
|---|---|
| 10% | Up to $25,600 |
| 12% | $25,601 – $104,050 |
| 22% | $104,051 – $218,250 |
| 24% | $218,251 – $416,650 |
| 32% | $416,651 – $529,100 |
| 35% | $529,101 – $793,650 |
| 37% | Above $793,650 |
Standard deduction: $33,200 (married filing jointly) / $16,600 (single) | 401(k) elective-deferral limit: $25,500 projected (before catch-up contributions)
The typical Roth conversion strategy fills the 22% or 24% bracket — converting enough to bring taxable income to the top of that bracket without crossing into the next. For clients with large traditional IRA balances who expect higher income in retirement (from required minimum distributions, business income, or Social Security), locking in today's rates can save meaningfully over time.
A Roth conversion must be completed by December 31 to count for 2026. Unlike IRA contributions, there is no grace period into 2027, and conversions can no longer be reversed once completed. Size the conversion carefully with your CPA before acting.
Move 3: Charitable Giving Strategies
For clients who give to charity, year-end is when the tax efficiency of those gifts is determined. A few strategies worth knowing for 2026:
Donor-Advised Fund (DAF) contributions.
A DAF lets you make a tax-deductible contribution this year and direct the grants to specific charities over time — this year, next year, or beyond. For clients who have a significant year from a tax standpoint (a business sale, a large Roth conversion, a concentrated stock sale), bundling several years of charitable giving into a single DAF contribution in the high-income year can be more tax-efficient than spreading gifts evenly.
Donating appreciated stock directly.
Donating long-term appreciated securities — stock held more than a year that has grown significantly in value — directly to a public charity or DAF can allow you to deduct the fair market value of the gift and avoid capital gains tax on the appreciation. For itemizers with qualifying positions, this is typically more efficient than selling the stock and donating the cash proceeds, which would trigger capital gains. Note that for 2026, charitable deductions for itemizers are subject to a 0.5%-of-AGI floor, and the deduction for appreciated property is generally capped at 30% of AGI (with a five-year carryforward). The strategy works best when the security is long-term, the charity or DAF is a qualifying public organization, and you have sufficient itemized deductions to benefit.
Qualified Charitable Distributions (QCDs) for clients over 70½.
If you're 70½ or older, you can make a Qualified Charitable Distribution directly from your IRA to a qualifying charity — up to $111,000 in 2026. The transfer must go directly from the IRA to the charity; you cannot take a distribution first and then donate it. A QCD can count toward your Required Minimum Distribution and is excluded from taxable income entirely — but you cannot also claim a charitable deduction for the same amount. For retirees with IRA assets and charitable intent, this is often the most tax-efficient giving strategy available.
Move 4: Year-End Gifting
The 2026 annual gift tax exclusion is $19,000 per recipient. A married couple can give $38,000 to the same recipient — either by each spouse making a separate qualifying gift, or through a gift-splitting election that requires filing Form 709. For straightforward present-interest gifts made individually by each spouse, no reporting is required. Gifts exceeding the exclusion, gifts of future interests, and gift splitting all require Form 709 regardless of whether any tax is owed. Gifts within the exclusion reduce the taxable estate without using any lifetime exemption. Amounts not gifted by December 31 don't carry over; the exclusion resets annually.
For families with WA estate tax exposure, systematic annual gifting is one of the most straightforward strategies available. A couple with three adult children and four grandchildren can transfer $266,000 per year ($38,000 × 7 recipients) completely outside the estate. Over 10 years, that's $2.66 million removed from the taxable base — plus the appreciation on those assets that would have accumulated inside the estate.
For clients who want to do more than the annual exclusion allows, larger gifts remain possible and use against the lifetime exemption (now $15 million per person, permanent). The decision about larger gifts involves more planning — tax implications, family dynamics, and the appropriate use of trusts — but the annual exclusion amount is a free move available to virtually everyone with an estate tax exposure.
Move 5: WA Estate Tax Review
For clients with estates above $3 million, the last two months of the year are a good time to review whether the estate plan still reflects the current asset picture — and whether the bypass trust provisions, gifting program, and life insurance are properly coordinated.
A few questions worth asking before year-end:
Has the estate grown materially since the estate plan was last reviewed? If so, does the bypass trust funding amount still make sense?
Are the annual gifts being made systematically — to the right recipients, at the right amounts, with appropriate documentation?
For estates with illiquid assets (a business, real estate, concentrated stock), is there a plan for meeting the WA estate tax obligation without a forced sale?
Have beneficiary designations on retirement accounts and life insurance been reviewed recently? These transfer outside the estate plan and are commonly out of date.
Washington's estate tax exemption is frozen at $3 million with no inflation adjustment. As assets appreciate, more families cross the threshold every year. If you haven't reviewed your estate tax exposure recently, November is a good time to do it — before year-end moves are made and while there's still time to act.
One More Thing
The five moves above aren't independent. The size of a Roth conversion affects the tax efficiency of charitable gifts. The gifting strategy interacts with the estate plan. The portfolio review informs the loss harvesting. The most effective year-end planning integrates all of it — which is why it works best when the financial advisor, the CPA, and the estate attorney are looking at the same picture at the same time.
If you'd like to walk through any of these with us before year-end, reach out. This is the time of year when a conversation actually has the potential to change the outcome.