Most people think tax planning happens in March, when the CPA calls with a number.
By then it’s too late to change anything.
The moves that actually move your tax bill happen in the next 90 days - while you can still do something about it.
Here’s what to look at before December 31.
The Short Version
Check if your company withheld enough on your stock vests
Sell your losers before year-end to offset your winners
Get money into a Roth the back door way, since the front door’s closed to you
Make sure your Q4 tax payment is actually enough
Decide on your giving now, not in the last week of December
1) Check Your Stock Withholding
When your company stock vests, they withhold taxes on it automatically - usually 22%.
Here’s the problem. If you’re a high earner, your actual tax rate on that income is probably 32% or 37%. That gap between what got withheld and what you actually owe doesn’t show up until you file your return. By then it’s a bill, not a decision.
Pull up what’s vested this year. Add it up. Compare it to what you’ll actually owe at your real tax rate. If there’s a gap - and there usually is - you’ve got two options. Ask your employer to withhold more from your regular paycheck for the rest of the year, or send in a bigger payment this quarter to cover it.
Either one works. Finding out in April doesn’t.
2) Sell Your Losing Positions
If you’ve got anything sitting at a loss in a regular investment account - not your 401(k), a taxable account - now’s the time to sell it and use that loss to offset gains you’ve had elsewhere this year.
This matters most if you sold something for a profit this year, or cashed out stock from work. The loss cancels out the gain, dollar for dollar, and lowers what you owe.
One rule to know. If you sell something at a loss and buy the same thing back within 30 days, the loss doesn’t count - the IRS calls this a wash sale. If you still want that money invested, buy something similar instead of the exact same thing.
3) Fund Your Backdoor Roth
Roth IRAs are one of the best tools out there - tax-free growth, tax-free withdrawals. Problem is, once you’re earning what you’re earning, you’re not allowed to contribute to one directly.
There’s a legal workaround. Put money into a regular IRA, then convert it to a Roth right away. That’s the “backdoor” everyone talks about.
If your 401(k) plan allows it, there’s a bigger version of this too - putting extra after-tax money into your 401(k) and converting that. Can mean tens of thousands of extra dollars a year in Roth space, and most people who have access to it never use it.
Both of these have to happen before the calendar flips. You can’t go back and do a 2026 contribution in February of next year.
4) Check Your Q4 Tax Payment
Here’s a mix-up that costs people money every year. Filing for an extension gives you more time to file your return. It does not give you more time to pay what you owe.
If your Q4 payment to the IRS is short, you start owing penalties on that gap - regardless of what your accountant does next April.
The safe number to hit is either 90% of what you’ll owe this year, or 110% of what you owed last year - whichever is smaller. Hit that and you won’t get hit with a penalty, even if your final number shifts once your bonus, vests, or other income settles.
Most of what you’re going to earn this year is already known. This is your last real shot to get that number right before it’s locked in.
5) Plan Your Charitable Giving
If you give to charity and you’ve thought about combining a few years’ worth of giving into one lump sum - what’s called “bunching” - Q4 is when you actually make that call. Not the last week of December, when everyone else is trying to do the same thing.
And if you’re planning to give and you’re holding stock that’s gone up in value, give the stock directly instead of selling it first. You skip the tax on the gain entirely and still get the same deduction.
Playing the Long Game
None of this is complicated. What kills people is running out of time to act on it.
Pull your numbers this week - your vests, your gains and losses, your Roth room, your tax payment - and make the calls while you’ve still got a quarter left, not a return left to file.
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Upholdings Private Wealth is a registered investment adviser in applicable jurisdictions. Registration does not imply any specific level of skill or training.
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