As 2026 draws to a close, year-end financial planning decisions can have a meaningful impact on tax liability and an overall financial plan. A good income projection is an important first step, providing a clearer picture of where a taxpayer is likely to land for the year and which tax brackets and thresholds may come into play. That information can help drive decisions, for example, of whether it makes sense to accelerate income into 2026, defer it to a future year, or take steps to reduce taxable income before the end of the year.
A solid income projection may answer two important questions:
- What is your marginal income tax bracket?
- How much room do you have before reaching the next higher bracket or potentially dropping into the next lower tax bracket?
Beyond these income-based phaseouts and thresholds, managing taxable income within brackets themselves is another important consideration for year-end planning. While moving from one bracket to the next may have a relatively modest impact in some cases, larger increases in the marginal tax rate can make income management strategies particularly valuable before year-end. Looking closer at the current tax brackets, two meaningful “jumps” stand out:
See more: The Advisor's Real Benchmark
2026 tax rates, schedules and contribution limits
In concert with considering key income thresholds, understanding where a taxpayer falls within the tax brackets can help drive year-end planning decisions, such as:
- Could a partial Roth IRA conversion make sense while remaining within the current tax bracket?
- Could a tax-deferred retirement plan contribution help reduce your taxable income or the applicable marginal tax bracket?
- Could accelerating or deferring income or deductions before year-end make sense?
- For business owners, could accelerating or deferring expenses before year-end make sense?
Seek Guidance
Year-end planning is not simply about minimizing taxes today; it is about making informed decisions that may support broader financial planning goals. Understanding where your income is likely to fall, and how close you may be to key tax thresholds, can help identify opportunities to manage the timing of income and deductions. Because every taxpayer’s circumstances are different, working with a qualified tax professional and financial advisor can help determine which strategies may make sense for your situation.
Bill Cass, Director of Wealth Planning
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