What's already decided in your 2026 taxes, and what you can still change
When it comes to taxes, December gets all the attention, but October is when you can still make meaningful moves to change the outcome of your tax picture. At this point in the year, most of your 2026 tax bill is already written. The good news is that there is still a part you can change. Roth conversions, Required Minimum Distributions (RMDs), and charitable gifts from your IRA generally must be finalized by December 31, or earlier depending on your custodian's cutoff date for processing transactions.
Start with two lists
What is already decided: Items such as bonuses and restricted stock units (RSUs) that vest this year, deferred compensation payouts you elected years ago, and your required minimum distribution (RMD) taken out of a traditional IRA each year once you are 73 (or 75 if you were born in 1960 or later).
What is still open: When you exercise options or sell company stock, a Roth conversion, beneficiary IRA distributions, or next year's deferral election, if your employer offers one, etc.
Be mindful of the following
22% withholding: Employers usually withhold federal tax on bonuses and RSUs at a flat 22%. If your top bracket is 32%, 35%, or 37%, you might owe taxes in April. If last year's adjusted gross income was over $150,000, you generally avoid an underpayment penalty by paying 110% of last year's tax, or 90% of this year's.
3.8% on investment income: The net investment income tax adds 3.8% once modified adjusted gross income is above $200,000 single or $250,000 married filing jointly.
Medicare looks back two years: Your 2026 income generally sets your 2028 premiums. For 2026 premiums, which use 2024 returns, the surcharge (IRMAA) starts above $109,000 of modified adjusted gross income for single taxpayers or $218,000 for joint taxpayers.
Four strategies worth a look
Roth conversions in low income years: The years between retiring and starting RMDs or Social Security can be your lowest-income years. Converting some in those years can mean paying taxes at lower rates.
A donor-advised fund in a big income year: In a year with a large vest, bonus, or sale, you can fund a donor-advised fund, deduct the gift that year if you itemize, and grant to charities over later years.
Qualified Charitable Distributions (QCDs) to reduce AGI and stay under the Medicare lines: From age 70½, you can give up to $111,000 (in 2026) straight from your IRA to charity. It counts toward your RMD if processed correctly, and isn't included in your taxable income, which can keep you under an IRMAA threshold. Note that a QCD cannot go to a donor-advised fund.
Gifts with intention: In 2026 you and your spouse can each give up to $19,000 to anyone without triggering gift tax or filing requirements. Larger gifts can still be made but will use part of your lifetime exemption, which is $15,000,000 per person in 2026. Tell your loved ones why you give the way you do! That conversation is often what they remember most.
If you are receiving an inheritance
Inherited stock and real estate generally take a new cost basis equal to their value on the date of death. That can make diversifying cheaper than you expect. Verify that the cost basis is correct on investment accounts and keep the appraisal documents for real estate.
If you inherited a traditional IRA from someone other than your spouse, in most cases you must empty the account by December 31 of the 10th year after the owner's death. If the original IRA owner had already started taking RMDs before death, beneficiaries are generally required to take annual distributions in years 1-9 in addition to emptying the account by year 10. Withdrawals are generally taxed as ordinary income, on top of your own. You should establish a plan for all ten years, not just this one to manage taxes as best as you can.
Consider what to do with that money; money that isn't allocated tends to drift into lifestyle creep: you don't know where it went, but it went somewhere.
Custom for your life
Every move has a trade-off, and every family is different. Whether a strategy fits your situation depends on your overall financial situation and goals for this year and future years. Gather your numbers before December and talk to your financial advisor, so you can see where you land and what can be done in your specific case.
— Leslie Rea, MBA, CFP®, MCEP® · AG Wealth Management
General education only. Not investment, tax, or legal advice. Not a recommendation to buy or sell any security. Reading this post does not create an advisory relationship. AG Wealth Management, PLLC is a fee-only registered investment adviser and a fiduciary to its clients. Consult your financial advisor (and tax or legal professionals as needed) before acting. Form ADV: adviserinfo.sec.gov.
