10 Year-End Tax Moves Every Texas Resident Should Make Before December 31

December 31 is not just the end of the year — it is the hard deadline for most tax-saving strategies. Once it passes, your options for reducing what you owe on your 2026 return are gone.

The good news: if you act in October or November, you still have time to make meaningful moves. Here are ten that every Texas resident and small business owner should consider.

1. Maximize Your Retirement Contributions

Contributions to a traditional IRA, 401(k), or SEP-IRA reduce your taxable income dollar for dollar. For 2026, the 401(k) contribution limit is $23,500 (plus a $7,500 catch-up if you are 50 or older). IRA contributions can be made until April 15, but 401(k) and SEP-IRA contributions for employees must be made by December 31.

If you are self-employed, a SEP-IRA is one of the most powerful tools available — you can contribute up to 25% of net self-employment income, up to $70,000.

Action: Contact your plan administrator or tax professional now to confirm your contribution limits and deadlines.

2. Review Your Estimated Tax Payments

If you are self-employed, a freelancer, or have significant investment income, you are required to make quarterly estimated tax payments. The fourth-quarter payment for 2026 is due January 15, 2027 — but if you have underpaid throughout the year, you may owe a penalty.

October is the right time to review your year-to-date income and payments and make any catch-up payments before year-end.

Action: Pull your year-to-date income and compare it to your estimated payments. A tax professional can calculate whether you are on track.

3. Accelerate Business Deductions Before December 31

If you own a business or are self-employed, expenses paid by December 31 are deductible on your 2026 return. This includes:

• Office supplies and equipment


• Software subscriptions


• Professional development and training


• Business-related travel and meals (subject to limits)


• Marketing and advertising costs

If you were planning to make a business purchase in early 2027, consider moving it to December 2026 to capture the deduction this year.

Action: Review your planned business expenses and consider accelerating any that make sense.

4. Take Advantage of Section 179 and Bonus Depreciation

If your business purchased equipment, vehicles, or other qualifying property in 2026, you may be able to deduct the full cost in the year of purchase rather than depreciating it over several years. Section 179 allows up to $1,220,000 in immediate expensing for 2026.

Bonus depreciation allows an additional 40% first-year deduction on qualifying property placed in service during 2026.

Action: Talk to your tax professional before year-end to confirm which purchases qualify and how to maximize your deduction.

5. Harvest Investment Losses

If you have investments that have declined in value, selling them before December 31 allows you to realize a capital loss that can offset capital gains — and up to $3,000 of ordinary income per year. Unused losses carry forward to future years.

This strategy, called tax-loss harvesting, is most effective when you have realized gains elsewhere in your portfolio.

Action: Review your investment accounts and identify positions with unrealized losses. Consult a tax professional before selling to avoid the wash-sale rule.

6. Make Charitable Contributions

Cash donations to qualified charities are deductible if you itemize. Donations of appreciated stock can be especially powerful — you avoid capital gains tax on the appreciation and still deduct the full fair market value.

Donations must be made by December 31 to count for the 2026 tax year. Keep your receipts and acknowledgment letters.

Action: If you plan to donate this year, do it before December 31 and request written acknowledgment from the charity.

7. Review Your Health Savings Account (HSA)

If you have a high-deductible health plan, you can contribute to an HSA and deduct the full contribution. For 2026, the limits are $4,300 for individuals and $8,550 for families (plus a $1,000 catch-up if you are 55 or older).

HSA contributions can be made until April 15, 2027, for the 2026 tax year — but the sooner you contribute, the sooner the money grows tax-free.

Action: Check your current HSA balance and contribution level. If you have room, consider topping it off before year-end.

8. Check Your Withholding

If you are a W-2 employee, your employer withholds federal income tax from each paycheck. If too little has been withheld, you will owe a balance — and possibly a penalty — when you file.

October is a good time to review your withholding using the IRS Tax Withholding Estimator and submit an updated W-4 to your employer if needed. Any changes made now will affect your last few paychecks of the year.

Action: Use the IRS withholding estimator at irs.gov and update your W-4 if you are under-withheld.

9. Consider a Roth Conversion

If your income is lower than usual this year — due to a job change, business loss, or other circumstance — it may be a good time to convert some or all of a traditional IRA to a Roth IRA. You pay income tax on the converted amount now, but future growth and withdrawals are tax-free.

Roth conversions must be completed by December 31 to count for the current tax year.

Action: Review your income for the year and discuss a potential Roth conversion with your tax professional before year-end.

10. Get Your Books in Order Before Year-End

If you own a business, the quality of your year-end bookkeeping directly affects the accuracy of your tax return. Disorganized records mean missed deductions, errors, and delays.

October through December is the right time to:

• Reconcile all bank and credit card accounts


• Categorize all business expenses


• Collect W-9s from contractors you paid $600 or more


• Review accounts receivable and write off any uncollectible debts

Action: If your books are behind, engage a bookkeeper now — before the year-end crunch makes it harder to find one.

Frequently Asked Questions

What is the deadline for year-end tax moves in Texas?

Most year-end tax strategies must be completed by December 31. A few — like IRA contributions and HSA contributions — have extended deadlines of April 15, but retirement plan contributions for employees and business owners generally must be made by December 31.

Can a Texas small business owner deduct equipment purchased in December?

Yes. Equipment placed in service by December 31 qualifies for Section 179 expensing and bonus depreciation on your 2026 return. The purchase must be made and the equipment must be in use by year-end.

How do I know if I should itemize or take the standard deduction?

The standard deduction for 2026 is $15,000 for single filers and $30,000 for married filing jointly. If your itemized deductions — mortgage interest, state and local taxes (capped at $10,000), charitable contributions, and medical expenses — exceed those amounts, itemizing saves you money. A tax professional can run the numbers for you.

What if I missed estimated tax payments earlier in the year?

You can make a catch-up payment before January 15, 2027. A tax professional can calculate the penalty exposure and help you decide whether to pay now or wait until filing.

Don't Let December 31 Sneak Up on You

These moves are only available while the year is still open. Once January arrives, your options narrow significantly.

Book a free consultation with Texas ClearTax Solutions before year-end — a licensed IRS Enrolled Agent serving all of Texas 100% online. We will review your situation, identify the moves that make sense for you, and make sure you go into 2027 with your taxes handled.

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