INSIGHT

Year-End Tax Planning Strategies for High Earners

Edmond Zhou • July 16, 2026

Services: Private Client Services

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The fourth quarter is a critical window. For high earners, the decisions you make between October and December can shape your tax picture for the entire year. Once January of next year arrives, all your best planning opportunities and options will be closed for the prior tax year.

The challenge is that high earners face a more complicated tax landscape than most. You’re likely managing a mix of W-2 income, investment gains, stock options, business income, and possibly equity from a liquidity event. Any one of those can push you into a higher bracket or trigger a surtax you weren’t expecting.

7 Top Year-End Tax Planning Strategies for High Earners

This article covers several of the most impactful year-end strategies available to high earners, from income deferral and loss harvesting to charitable giving and estate planning moves.

1. Know Where You Stand Before You Plan

You can’t make smart year-end moves without knowing your projected taxable income for the year. Pull together your income sources, review any capital gains you’ve already realized, and get a clear sense of where you’ll land before December 31. This is especially important if you’ve had a non-routine year. A business sale, a large bonus, or the exercise of stock options can all create unexpected tax exposure.

2. Accelerate Deductions or Defer Income

Once you know your income trajectory, you have a choice: can you push income into next year, or should you pull deductions into this one? If you expect to be in a lower bracket next year, say, because you’re retiring, selling a business, or simply had an unusually high-income year, deferring a bonus or delaying a consulting invoice can make a meaningful difference. On the deduction side, consider whether you can accelerate payments that qualify or purchase capital assets for your business to accelerate deductions. Bunching deductions into a single year often produces more benefit than spreading them across multiple years.

3. Max Out Retirement Contributions

This one sounds simple, but it’s surprising how often high earners leave money on the table here. If you have a 401(k), make sure you’re on track to hit the annual contribution limit. If you’re self-employed or run a business, a SEP-IRA or solo 401(k) can allow for significantly higher contributions, while the choice between a traditional IRA vs. Roth IRA may require a separate strategy. Defined benefit plans are another option worth exploring for business owners with substantial self-employment income.

In that instance, the contribution limits are much higher, and the deduction can be substantial. If you’re over 50, take advantage of catch-up contributions. These aren’t glamorous, but they reliably reduce taxable income.

4. Harvest Losses to Offset Gains

If you have taxable investment accounts, review your portfolio for positions sitting at a loss. Selling those before year-end lets you offset capital gains you’ve already realized. If your losses exceed your gains, you can deduct up to $3,000 against ordinary income, with the remainder carrying forward to future years.

Be careful about the wash-sale rule. If you repurchase a substantially identical security within 30 days before or after the sale, the IRS disallows the loss. You can reinvest the proceeds in a similar, but not identical, holding to maintain your market exposure while still capturing the tax benefit.

5. Review Your Stock Options and Equity Compensation

If you hold incentive stock options (ISOs) or non-qualified stock options (NQSOs), year-end is the right time to revisit your exercise strategy. Exercising ISOs can trigger the alternative minimum tax (AMT), so timing matters. NQSOs are taxed as ordinary income upon exercise, which means a large exercise in a high-income year compounds your liability. Neither is inherently better.

The right approach depends on your overall income picture, the spread between the strike price and fair market value, and your expectations for the stock itself. Restricted stock units (RSUs) vest on a schedule you can’t always control, but knowing when large tranches will vest can help you plan around them.

6. Use Charitable Giving Strategically

If you plan to give to charity this year, think about how you give, not just how much. Donating appreciated securities directly to a charity or to a donor-advised fund (DAF) lets you avoid paying capital gains tax on the appreciation while still claiming a deduction for the full fair market value. A DAF is particularly useful if you want the tax benefit this year but haven’t decided which charities to support yet. You fund the account now and make grants on your own timeline.

Qualified charitable distributions (QCDs) are worth noting too. If you’re 70½ or older and have an IRA, you can transfer up to $105,000 directly to a qualified charity, satisfying your required minimum distribution without the distribution showing up as taxable income.

7. Think About Gifts and Estate Planning Moves

The annual gift tax exclusion lets you give up to $19,000 per recipient in 2026 without using any of your lifetime exemption. For high-net-worth families, this is a straightforward generational wealth transfer strategy that can move wealth out of a taxable estate each year. Married couples can give $38,000 per recipient if they elect gift-splitting. It’s also worth noting that the federal estate tax exemption has increased to $15 million per individual in 2026, or $30 million for married couples, a significant jump from prior years.

These amounts reset on January 1, so if you’ve been meaning to make gifts this year, do it before December 31. If your estate is large enough that the federal exemption is a concern, year-end is also a good time to review whether any larger planning strategies, such as GRATs, irrevocable trusts, or family limited partnerships, are worth addressing before the calendar turns.

Working With BPM

For high earners, the strategies that move the needle aren’t always obvious, and the cost of missing a window can be significant. The Private Client Services team at BPM works with high-net-worth individuals, executives, and business owners to build personalized tax roadmaps, ones that account for your full picture, not just a single return.

From stock option planning and estate strategies to charitable giving and retirement contributions, we bring the kind of proactive, year-round thinking that year-end planning requires. If you want to know if you’re heading into the new year in the strongest position possible, contact us.