Around this time of year, everyone starts thinking about fall weather, football, and the approaching holidays. At Harvest Point®, the fourth quarter means the clock is officially ticking on your year-end tax planning.
Most people treat tax season like a springtime chore. By the time you gather your documents in April, you are just looking backwards. True tax optimization happens now, in 2026, while we still have time to change the outcome.
Waiting until December 31 to think about your strategy is one of the easiest ways to leave money on the table. Here are the four most common fourth quarter mistakes we see, and exactly how we help you avoid them.
1. Waiting Until the Last Minute to Max Out Accounts
One of the biggest pitfalls is waiting until the final two weeks of December to fund retirement accounts or execute charitable donations.
When things get rushed at the very end of the year, processing delays can completely ruin a great strategy. If a bank transfer doesn't clear or a check isn't settled by midnight on December 31st, that deduction belongs to next year, not this one.
- Spread out contributions: Avoid trying to drop a massive lump sum into accounts during the chaotic holiday rush.
- Verify plan rules: While IRA contributions can technically be made until Tax Day in April, employer-sponsored plans like 401(k)s usually require workplace payroll contributions to process before the final calendar year checks.
- Take action by November: We always aim to have your major year-end movements initiated before Thanksgiving to give you a comfortable safety cushion.
2. Ignoring Capital Gains Distribution Blind Spots
If you hold mutual funds in a taxable brokerage account, you might be in for an unpleasant surprise in December. Even if you didn’t sell a single share of your fund this year, the fund managers themselves buy and sell assets inside the fund all year long.
In Q4, those funds pass those net capital gains down to you. If you aren't paying attention, you could get hit with a significant tax bill for gains you didn't even actively realize.
- Review early estimates: Most mutual fund companies publish their estimated capital gains distributions in October and November, allowing us to actively prepare.
- Tax losses: Look through your portfolio for underperforming investments that can be sold at a loss to directly offset those upcoming taxable distributions.
- Look before buying: Avoid buying new mutual funds late in Q4 until they have made their annual distributions, so you don't inherit someone else's tax liability.
3. Forgetting the RMD Rules
If you are of a certain age, the IRS forces you to start taking Required Minimum Distributions (RMDs) from traditional IRAs and 401(k)s every year.
Forgetting to take this distribution is an incredibly costly mistake. The IRS takes this deadline very seriously, and the penalty for missing it is a steep percentage of the amount you were supposed to withdraw.
- Automate the scheduling: Set up automatic RMD scheduling early in the fall, so you don't have to worry about it during the holidays.
- Utilize a QCD: If you don't need the income and want to avoid the tax hit entirely, execute a Qualified Charitable Distribution (QCD). This sends the money directly from your IRA to a qualified charity, satisfying your RMD without adding a dime to your taxable income.
RMD money does not have to be used right away—it can be transferred to another investment; it just cannot remain in the original account.
4. Planning Your Taxes in a Total Vacuum
Your financial life doesn't operate in isolated silos, but it is easy to accidentally treat it that way. A move that looks great for an investment portfolio might create an accidental tax drag if your professional team isn't communicating.
True Q4 planning requires looking at the whole chessboard at once.
- Coordinate with your CPA: Make it a priority to sync up with your tax professional before making major year-end trades or asset allocations to ensure our strategies align perfectly.
- Factor in life changes: Did you get married, change jobs, retire, or sell a property this year? A shift in your life completely changes your tax bracket and how we need to optimize your accounts.
Tax planning isn't about finding loopholes; it's about avoiding unforced errors. By taking a proactive review of your finances before December, you can make intentional, wise decisions that protect your hard-earned wealth. If you could use help planning for tax season, fill out our Discovery Questionnaire to schedule a 30-minute introductory call. Together, we can explore your goals and values to determine whether Harvest Point® is the right partner for you.