Five Tax Planning Moves for High-Net-Worth Individuals and Families

The last few months of the year can be some of the most valuable for tax planning.

For high-net-worth individuals and families, the goal is not simply to find another deduction before December 31. It is to look at your income, investments, charitable plans, estate strategy, and expected tax liability together, while there is still time to make thoughtful decisions.

Download the Tax Savings Checklist to identify the areas worth reviewing before December.

5 Tax-Planning Moves

Waiting until tax documents arrive next year may tell you what happened. Planning now gives you an opportunity to influence the outcome.

Here are five tax planning moves worth reviewing before December.

1. Review Capital Gains and Losses Across Your Portfolio

A strong investment year can create an equally significant tax consideration.

If you sold investments, real estate, business interests, or other appreciated assets during 2026, review your realized gains and losses before making additional portfolio moves.

Investments currently trading below their cost basis may present an opportunity to realize losses that offset capital gains. If total capital losses exceed capital gains, individuals can generally deduct up to $3,000 of the remaining net capital loss against ordinary income, with unused losses carried forward to future years.

But tax-loss harvesting should not happen in isolation.

The IRS wash-sale rules can prevent a loss deduction if you buy substantially identical securities within 30 days before or after a loss sale. Your investment strategy, expected future gains, portfolio concentration, and overall tax position should all factor into the decision.

Before December: Ask your CPA and investment advisor to review realized gains, unrealized losses, capital-loss carryforwards, and any significant transactions still anticipated this year.

2. Be More Strategic About Charitable Giving

If philanthropy is already part of your financial plan, the timing and form of your gifts may make a meaningful difference.

Rather than automatically writing a check, consider whether appreciated assets could be a better source for your charitable contribution. The IRS generally allows deductions for qualifying property donations, subject to applicable rules and adjusted gross income limitations.

For some families, a donor-advised fund may also help separate the timing of the charitable tax deduction from the timing of grants to individual charities. Certain documentation and other requirements apply to contributions to donor-advised funds.

This becomes especially important in a year when you have unusually high income, a large bonus, a liquidity event, a business sale, or significant investment gains.

Before December: Review your expected charitable giving for both 2026 and 2027. Determine whether the timing, amount, and assets being donated fit your broader tax plan.

3. Maximize the Right Retirement Accounts

Even for individuals with significant taxable investments, tax-advantaged retirement accounts deserve a year-end review.

For 2026, the employee contribution limit for most 401(k), 403(b), and governmental 457 plans is $24,500. The general catch-up contribution for eligible participants age 50 and older is $8,000, while eligible participants ages 60 through 63 may have a higher catch-up limit of $11,250.

Another important change affects some high earners in 2026. Certain participants whose prior-year wages with the plan sponsor exceeded $150,000 must make catch-up contributions on a Roth basis when the plan offers the applicable Roth feature.

Business owners and self-employed individuals may have additional planning opportunities through SEP IRAs, Solo 401(k)s, profit-sharing arrangements, or other retirement plans. The 2026 defined-contribution plan limit is $72,000 before applicable catch-up contributions.

Before December: Check your year-to-date contributions and determine whether your current retirement strategy still makes sense given your income, age, business interests, and long-term tax expectations.

4. Revisit Your Estate and Gifting Strategy

Income tax planning should not be separated from wealth-transfer planning.

The federal annual gift tax exclusion remains $19,000 per recipient for 2026. For married couples, coordinated gifting may allow significantly more wealth to be transferred across a family, depending on the circumstances and how the gifts are structured.

But annual exclusion gifts are only one piece of the conversation.

Families may also want to consider whether 2026 is the right time to fund trusts, transfer interests in closely held businesses or family entities, help younger generations with major expenses, or make other planned wealth transfers.

The objective is not to make gifts simply to reduce an estate. A good strategy considers control, family needs, asset appreciation, income taxes, estate taxes, and the wealth's long-term purpose.

Before December: Review gifts already made during 2026, planned gifts, trusts, family entities, and larger wealth-transfer objectives with your CPA and estate attorney.

5. Calculate Your Expected 2026 Tax Bill Before the Year Ends

One of the most useful year-end planning exercises is also one of the simplest:

Estimate your tax liability before the year is over.

For a high-net-worth household, last year's return may no longer be a reliable picture of this year's tax position. Consider what changed.

Did you:

• Receive a larger bonus or equity compensation?
• Exercise or sell stock options?
• Sell a business, investment, or property?
• Significantly change partnership or business income?
• Receive an unusually large capital gain?
• Increase investment income?
• Make significant charitable gifts?
• Make or receive major wealth transfers?

Once we bring those pieces together, we can develop a 2026 tax projection and identify whether additional planning or payments are needed.

This is also a good time to review estimated taxes. Higher-income taxpayers generally need to pay the lesser of 90% of the current year's expected tax or 110% of the prior year's tax to satisfy the federal estimated-tax safe harbor when prior-year adjusted gross income exceeded $150,000, or $75,000 for married taxpayers filing separately.

Before December: Request an updated tax projection using current income, investment activity, business results, deductions, and expected year-end transactions.

FAQs

What should high-net-worth individuals review before year-end?

High-net-worth individuals should consider reviewing projected taxable income, capital gains and losses, investment activity, charitable contributions, retirement contributions, estimated tax payments, estate and gift plans, trusts, and any major business or liquidity events expected before year-end.

When should year-end tax planning begin?

Ideally, year-end tax planning should begin in the fall. Starting before December gives your CPA and other advisors more time to evaluate alternatives and implement strategies that must be completed during the calendar year.

Can tax-loss harvesting reduce capital gains taxes?

Potentially. Realized investment losses can generally offset realized capital gains. However, wash-sale rules, portfolio objectives, carryforward losses, and the taxpayer's overall situation should be evaluated before selling investments solely for tax purposes.

What is the 2026 annual gift tax exclusion?

The federal annual gift tax exclusion is $19,000 per recipient in 2026. Larger gifts may also be possible, but they can have gift, estate, income tax, and reporting implications that should be reviewed with your advisors.

Why is tax planning especially important after a high-income year?

An unusually high-income year may affect capital gains taxes, estimated payments, charitable deduction strategies, investment decisions, and other areas of a family's tax plan. Modeling the tax impact before year-end gives you time to evaluate strategies rather than discovering the result when the return is prepared.

Now's Your Planning Opportunity

The most valuable question is rarely, “What can I deduct?” It is: “What decisions can I still make?”

LMJ CPAs works with executives, business owners, founders, and multi-generational families to coordinate tax planning with investments, estate and gift strategies, trusts, business interests, and long-term family goals.

Start with the Tax Savings Checklist to identify the areas worth reviewing before December. Then talk with your LMJ CPA advisor about which opportunities may apply to your financial situation.

This article is intended for general informational purposes and should not be considered tax, investment, or legal advice. Tax strategies depend on individual circumstances.