Why August Is the Right Time for Year-End Tax Planning
Every tax planning article you’ll read in the next four months will tell you to think about this in November or December. By then, your options have narrowed. Markets have moved. The window to act on anything meaningful is closing fast, and most of what’s left is cleanup, not strategy.
August is different. You know roughly what this year’s income looks like. If 2026’s volatility left you holding positions worth reviewing for losses, they’re probably still on the table right now. And you still have four months of runway to make decisions that actually compound before the year ends, instead of decisions made in a rush during the last week of December.
Three Moves Worth Making in August
- Check your bracket position. Know where the line sits between your current bracket and the next bracket up, and know roughly where your income puts you this year. If you’re below the ceiling, there may be room to pull forward income or execute a Roth conversion at your current rate. If you’re above it, there may be deductions worth accelerating instead.
- Look for harvesting opportunities. Most portfolios picked up at least a few positions worth reviewing for losses during this year’s volatility. Tax-loss harvesting works best when you do it deliberately, not when year-end pressure forces you to sell whatever’s easiest. The wash-sale rule still applies, so timing matters more than people assume.
- Review your charitable strategy. The OBBBA changed the math here. High earners who itemize now save 35 cents on the dollar for a charitable deduction, down from 37. If you give significantly, a donor-advised fund or, if you’re over 70½, a qualified charitable distribution is worth revisiting now, not in the last week of December when there’s no time left to structure it well.
The Real Advantage Isn’t the Strategy. It’s the Timing.
The people who end up paying less in taxes usually aren’t smarter than everyone else. They just started the conversation four months earlier. If you want to know what actually makes sense for your situation this year, that’s worth talking through now, not in December, when most of the good options are already gone.