Beat the Clock: Retirement Tax Deadlines Before December 31st
You have less than eight weeks to lock in your 2026 retirement tax savings. Many of the most valuable moves, from maxing out your 401(k) to taking required distributions, expire on December 31st. Miss them, and the opportunity is gone for good.
Use this guide to see what to act on now, whether you run a business, save as an individual – or both.
For Business Owners: Payroll Plays before December 31st
The last payroll of 2026 is your real deadline. Here's what to handle before it runs.
Max out your 401(k) deferrals. Employee contributions must come from paychecks dated by December 31, 2026. The limit is $24,500, plus an $8,000 catch-up for those 50+ or $11,250 for ages 60 – 63.
Behind on your goal? Increase your final paycheck deferrals or defer part of your year-end bonus before it is paid.
Set your reasonable compensation (S Corp Owners). Your W-2 salary determines how much your business can contribute through matching and profit sharing. Finalize compensation before your last 2026 payroll.
Update payroll for the new Roth catch-up rule. Beginning in 2026, employees earning more than $150,000 in 2025 FICA wages must make catch-up contributions as Roth. Confirm your payroll system is set up accordingly.
Send safe harbor 401(k) notices by December 1st. If you offer a safe harbor match for a calendar-year plan, employees must receive their notice 30 to 90 days before the new plan year starts. You can also still add a 3% nonelective safe harbor contribution to an existing 2026 plan by December 1st.
Notify SIMPLE IRA participants by December 31st. Employees can change their elections for 2027 through December 31st. Tell them your contribution formula for the coming year, either a match or a 2% nonelective contribution, before the window closes.
Deposit deferrals on time, every time. Send withheld employee contributions to the plan as soon as you reasonably can. Plans with fewer than 100 participants are safe if they deposit within 7 business days. Late deposits are one of the most common Department of Labor findings, and they cost you lost.
For Individuals: Moves to Make by December 31st
These deadlines apply to you whether you work for someone else, run your own business, or are already retired.
Boost your workplace plan contributions. Your 401(k), 403(b), or 457 contributions must come out of paychecks dated by December 31. Increase your contribution percentage now to capture more savings before the year ends. The same 2026 limits apply: $24,500, plus catch-up contributions if you're 50 or older.
Take your required minimum distributions (RMDs). If you're 73 or older, withdraw your RMD from traditional IRAs and workplace plans by December 31. Miss it, and you owe a 25% penalty on the shortfall, reduced to 10% if you fix it quickly. Turning 73 this year? You can delay your first RMD until April 1, 2027, but you'll then take two distributions in one tax year, which could push you into a higher bracket.
Check your inherited IRA. If you inherited an IRA from someone who had already started RMDs, you may owe an annual distribution even under the 10-year rule. The IRS has resumed enforcing penalties, so confirm whether you owe a 2026 withdrawal.
Complete Roth conversions. A conversion only counts for 2026 if it's finished by December 31. You can't undo a conversion later, so run the tax numbers with your advisor first.
Give directly from your IRA. If you're 70½ or older, a qualified charitable distribution lets you send money straight from your IRA to a charity. It counts toward your RMD and stays out of your taxable income, a strong benefit if you don't itemize. Complete it by December 31.
Clean up IRA balances before a backdoor Roth. The IRS calculates taxes on a backdoor Roth using your traditional, SEP, and SIMPLE IRA balances as of December 31. Rolling pre-tax IRA money into your employer's plan before year-end can help you avoid an unexpected tax bill.
End of the Year Tax Checklist
What can wait until 2027!
Not everything has to happen this year. You can still make 2026 IRA and HSA contributions until April 15, 2027. Business owners can fund employer contributions, open a SEP IRA, or adopt a new profit-sharing plan for 2026 up to their tax filing deadline, including extensions.
But the moves above can't wait. Act now, and talk with your CPA before December so you have time to plan, run the numbers, and update payroll.
Contribution limits and thresholds reflect IRS guidance available as of mid-2026. Confirm current figures before acting.
