Your Year-End Checklist Is Too Long. We’ll help you narrow it down.

The end of the year is busy for all of us. Every fall, the year-end checklists come out. Ours included. The final months of the year are busy for us all, so these checklists should be a great way to simplify things. But how to prioritize what’s the most time sensitive isn’t always clear. We’re here to help make that all clear by focusing on what needs to happen before ringing in the new year. 

The Ones That Expire

Roth conversions. A conversion counts in the year of execution. No exceptions. October, November, and December are the best months decide on this strategy because you know what the year looks like from tax perspective (or mostly). The first step is running a project to determine the optimal amount, if any, to convert. It’s too easy to miss the true ramifications when focusing on tax-brackets alone. If it makes sense to convert, make sure you do it before your custodian says it’s too late. While the IRS allows you until midnight on 12/31, some custodians may have earlier deadlines.

Gains and losses. Just like conversions, gains and losses are counted in the year taken. A proper analysis goes beyond tax-loss harvesting. Consider the gain side of the equation, too. Should gains be taken to rebalance the portfolio or reduce overconcentration? Don’t let your investment strategy suffer due to “avoid taxes at all cost” strategy. In the end, you’ll likely be worse for it. 

Charitable gifts. Gifts, including donor-advised fund contributions, must be completed by December 31st. Practitioners know the real deadline is usually earlier. Account openings and transfers take time, and there’s no grace period based on your intentions. 

A note for 2026: Itemizers now lose the first 0.5% of AGI in charitable deductions each year, and for those in the top bracket, itemized deductions are worth roughly 35 cents on the dollar instead of 37. This creates the need to reevaluate your gifting strategy. We can halp you determine what the new optimal strategy will be for you. 

RMDs and QCDs. Required minimum distributions (RMDs) and qualified charitable distributions (QCDs) are also in the 12/31 club. That includes inherited IRAs where the original owner died in 2020 or later, after their RMDs had begun. The IRS waived penalties on missed ones from 2021 through 2024, but that reprieve is over. If you're 70½ or older, a QCD can send up to $111,000 from your IRA straight to charity in 2026 without it counting as income. It can't go to a donor-advised fund, but once you reach RMD age, it does count toward your RMD.

Annual exclusion gifts. You can give $19,000 per recipient in 2026 without touching your lifetime exemption, and married couples can double it. And, at this point, you should be able to guess it’s a 12/31 expiration. For those of you planning for college, there’s a unique allowance for 529 accounts. 529s let you front-load five years of exclusions at once: $95,000 per beneficiary, or $190,000 from a married couple.

The Ones That Feel Urgent But Aren't

IRA, Roth IRA, and HSA contributions can wait until the April filing deadline. One exception: if you're planning a backdoor Roth, the pro-rata rule looks at your pre-tax IRA balances as of December 31. Rolling old pre-tax IRA money into your 401(k) before year-end, if the plan allows it, can eliminate that issue.

Lifetime gifts. These felt urgent in early 2025, when the exemption was scheduled to be cut roughly in half. The One Big Beautiful Bill Act took that off the table. The exemption is $15 million per person in 2026 and no longer set to sunset. Large gifts still deserve careful thought (the step-up trade-off is real), but they don't need to beat a clock.

Beneficiary reviews. These matter as much as anything on this list. It’s just not time sensitive in the same way. Review them whenever life changes, life insurance policies included.

The Ones on Someone Else's Calendar

A few deadlines aren't set by the IRS at all. Medicare open enrollment runs October 15 through December 7, and Part D drug lists can change every year, so a plan that fit last year may not fit now. On HealthCare.gov, December 15 is the cutoff for coverage that starts January 1. And check your FSA balance. Unless your employer offers a short grace period or a small carryover, it's use-it-or-lose-it.

The Verdict

December is for the things that expire. Roth conversions, gains and losses, charitable gifts, RMDs, and annual exclusion gifts belong on the calendar now, with enough lead time that "December 31" doesn't turn into "December 31 at 4:55 p.m."

Everything else is still worth doing. It just doesn't to get in the way of the year-end sensitive planning items. Those things still need to happen, but let’s wait until January and tackle those together. 

Composition Wealth, LLC (“Composition Wealth”) is a registered investment adviser. Advisory services are offered only to clients or prospective clients where Composition Wealth and its representatives are properly licensed or exempt from licensure.

This communication is for general informational purposes only and should not be considered investment, financial, tax, or legal advice. It should not be treated as a solicitation to buy or sell securities and does not consider individual investment objectives, strategies, tax status, or horizon. Please consult your own tax, legal and accounting advisors before making any related decisions.