Four Moves You Have Until December 31 to Make
I’m not a CPA, a tax attorney, or a financial advisor, and none of this is personal tax advice. Tax rules turn on details that are specific to you — your income, your state, your filing status, your accounts. Every figure here is sourced and current as of publication, but use this to build a question list for a professional, not as a substitute for one.
There’s a conversation that happens in tax offices every March, and it goes the same way every year.
Your preparer looks at the return. Then they say some version of: “If you’d come to me in October, I could have saved you real money. Now I’m just a historian.”
That’s the whole problem in one sentence. Tax preparation happens in the spring. Tax planning happens in the fall — and almost nobody does it, because September doesn’t feel like tax season. It feels like football and hurricane season and getting the gutters cleaned.
So let’s use it. Here are four moves that have to be made by December 31, and what each one is actually worth.
Move 1: Take your RMD — and understand the penalty if you don’t
If you’re 73 or older, the IRS requires you to pull a minimum amount out of your traditional IRA and most workplace retirement accounts every year. That’s the required minimum distribution, and the annual deadline is December 31.
Two details people get wrong:
The first one is a one-time exception. In the year you turn 73, you can delay that first distribution until April 1 of the following year. It’s a real option, and it’s usually a bad one — because taking two distributions in the same calendar year can stack your income and push you into ugly territory. Read the exception, then think hard before using it.
The second is the price of missing it. If you don’t take the full amount, the IRS applies an excise tax of 25% of what you failed to withdraw — dropping to 10% if you correct it within two years. That penalty is on the shortfall itself. It is, by a wide margin, the most expensive clerical error available to a retiree.
If you have multiple accounts, this is also the year to confirm which ones aggregate and which don’t. IRAs and 401(k)s do not follow the same rules, and that mismatch is where good, organized people get caught.
Move 2: Give from the IRA instead of the checkbook
This is the one that gets overlooked most, and for a lot of people it’s the single biggest number on this page.
If you’re 70½ or older, you can send money straight from your IRA to a qualified charity. It’s called a qualified charitable distribution — a QCD — and in 2026 the cap is $111,000 per person. A married couple who each have IRAs can each do it.
Here’s why it’s better than writing a check. A QCD doesn’t show up in your adjusted gross income at all. A regular donation is a deduction — which does you no good unless you itemize, and most people over 65 don’t anymore. A QCD lowers the income figure itself, before any of that. And because it satisfies your RMD, it does two jobs at once.
That lower income number matters beyond the tax bill. Adjusted gross income is what drives how much of your Social Security gets taxed, and it’s what Medicare looks back at to decide your Part B and Part D surcharges. Keeping income under a threshold is sometimes worth more than the deduction you gave up.
The mechanical part matters: the money must go directly from the IRA custodian to the charity. If it lands in your checking account first, it’s not a QCD — it’s a distribution and a donation, and you’ve lost the whole benefit. Call the custodian. Use their form.
Note that 70½ is younger than 73. There are three years in there where you can do this before you’re required to take anything at all.
Move 3: Look hard at a Roth conversion
A Roth conversion means moving money from a traditional IRA into a Roth, paying the tax on it now, and never paying tax on that money or its growth again.
The reason fall is the moment: the conversion has to happen by December 31 to count for this tax year. There is no April 15 grace period on this one — that extension applies to contributions, not conversions. And you can’t do it well in December, because doing it well means knowing roughly what your income is going to be, and then filling up the rest of a tax bracket without spilling into the next one. That’s an October and November calculation.
Who this tends to favor: someone in a low-income window — retired, not yet taking Social Security, not yet at RMD age — who expects higher taxes later, either their own or their heirs’. Those gap years are the cheapest tax real estate most people will ever own, and most of them get wasted.
Two cautions worth more than the enthusiasm. First, pay the conversion tax from outside the IRA if you possibly can; paying it with IRA money defeats much of the point. Second, watch the second-order effects — a conversion raises your income, which can pull more of your Social Security into taxable territory and can raise your Medicare premiums two years down the road. This is precisely the calculation to do with somebody, not on a legal pad at the kitchen table.
Move 4: Harvest your losses — and know the bonus deduction you now have
If you hold investments in a regular taxable brokerage account — not an IRA, not a 401(k) — you can sell the losers, use those losses to cancel out gains, and deduct up to $3,000 of net loss against ordinary income. Anything past that carries forward to future years. The sale has to settle by year-end.
Two rules keep people honest here. You can’t buy the same or a substantially identical security within 30 days before or after the sale — that’s the wash-sale rule, and it voids the loss. And this does nothing inside a retirement account, where gains and losses aren’t taxed as they happen.
While you’re running the numbers, make sure you know about the deduction that’s new enough that plenty of people still haven’t claimed it. For tax years 2025 through 2028, taxpayers 65 and older get an enhanced deduction of $6,000 per eligible person — $12,000 for a married couple where both qualify. It phases out above $75,000 of modified adjusted gross income for single filers and $150,000 for joint filers.
That phaseout is the reason it belongs on this list. If you’re sitting near the threshold, everything else on this page — how much you convert, whether you give from the IRA, when you realize a gain — can decide whether you keep it. These moves are not independent of each other. That’s exactly why they’re worth doing in one sitting, in the fall, with the numbers in front of you.
March is for history. This is the part where you can still change the ending.
The actual assignment
Pull three things into one folder: last year’s tax return, your most recent statements from every retirement account, and a rough guess at this year’s income.
Then call your preparer and ask for a planning appointment — the words are planning appointment, not my taxes — sometime in October or early November. Many will do it, and many will tell you nobody ever asks.
March is for history. This is the part where you can still change the ending.
Go be bold!
Put one calendar entry in this week: Call preparer — planning appointment. Then reply and tell me which of the four you’re chasing. I’ll run a follow-up on the one that gets the most questions.
Sources
- IRS, Retirement Plans FAQs Regarding Required Minimum Distributions — age 73, the December 31 deadline, and the 25%/10% excise tax
- IRS, Check your eligibility for the new enhanced deduction for seniors — $6,000/$12,000, phasing out at $75,000/$150,000, for 2025–2028
- Charles Schwab, Reducing RMDs With QCDs — the 2026 QCD limit of $111,000 and the 70½ age floor
- IRS, Topic no. 409, Capital gains and losses — the $3,000 net loss limit
- IRS, Publication 550, Investment Income and Expenses — the wash-sale rule
