Year-End Tax Moves Individuals Should Make Before Filing Season Begins

Year-end tax planning is often less about aggressive planning and more about making sure income, deductions, withholding, and credit positions are aligned before the return is filed. For individuals, the most important moves typically involve confirming information reporting, reviewing withholding and estimated tax exposure, preserving deduction support, and identifying items that can affect credits or repayment obligations tied to income-based benefits.

A first priority is gathering and reconciling expected tax documents. IRS guidance emphasizes collecting Forms W-2, Forms 1099, and other records supporting deductions and credits before filing, and reviewing prior-year return information where needed. Taxpayers with Marketplace coverage should confirm receipt and accuracy of Form 1095-A because the premium tax credit must be reconciled on Form 8962 if advance payments were made.

Taxpayers who received advance premium tax credit should also review whether household income, family size, or coverage changed during the year. Publication 974 explains that changes in income, marriage, divorce, dependents, employment, or eligibility for other coverage can materially affect the final premium tax credit computation and may create repayment exposure if advance payments exceeded the allowable credit. For tax years beginning after December 31, 2025, excess advance premium tax credit generally must be fully repaid rather than being capped by prior repayment limitations.

Another important year-end move is checking whether withholding and estimated payments are sufficient to avoid the addition to tax under IRC section 6654. Under section 6654, individuals generally avoid the penalty if timely payments equal the lesser of 90% of current-year tax or 100% of prior-year tax, increased to 110% if prior-year adjusted gross income exceeded $150,000, or $75,000 for married filing separately. Wage withholding is treated as paid ratably throughout the year unless the taxpayer establishes actual withholding dates, which means late-year withholding adjustments can sometimes cure earlier underpayments more efficiently than late estimated payments.

Individuals should also confirm identity and dependent information before filing. IRS guidance stresses that names, dates of birth, and Social Security numbers or ITINs must match official records exactly, especially for dependents and credit claims, because mismatches can delay processing or reduce credits.

For taxpayers who itemize or may itemize, year-end is also the time to preserve records for mortgage interest, state and local taxes, charitable contributions, and casualty losses. For rental property owners, records should also distinguish personal and rental use, capital improvements versus repairs, and placed-in-service dates for depreciation.

Finally, taxpayers expecting a refund should verify direct deposit information before filing. IRS guidance notes that incorrect routing or account numbers can delay or misdirect refunds.

In short, the most effective year-end tax moves are confirming reporting documents, reconciling income-sensitive credits, reviewing estimated tax and withholding sufficiency under section 6654, validating taxpayer and dependent identification data, and organizing deduction support before filing season begins.