Most people think about taxes in April. But the smartest financial moves happen in the middle of the year, when you still have time to actually do something about your tax bill. We are halfway through 2026, which means you have a real window right now to reduce what you owe come next spring. Here are three tax moves worth making before the year is over.
Why Midyear Is the Best Time for Tax Planning
Here is the thing about taxes: by the time April rolls around, most of your options are gone. You are just reporting what already happened. But right now, in the middle of the year, you can still make decisions that change the outcome. You can adjust your withholding, increase your contributions, and harvest losses before December 31. These are not complicated moves. They are just intentional ones.
Move 1: Check and Update Your W4 Withholding
Your W4 is the form you filed with your employer that tells them how much tax to withhold from each paycheck. If your life has changed this year, your withholding may be off.
Did you get married or divorced? Have a baby? Buy a home? Start a side hustle? Any of these changes can affect how much you owe at tax time. If too little is being withheld, you could face a big tax bill and potential penalties in April. If too much is being withheld, you are giving the government an interest free loan all year.
Log into your HR portal or ask your HR department how to update your W4. It takes about 10 minutes and can save you a significant headache next spring.
Move 2: Increase Your Retirement Contributions
If there is any room in your budget, now is a great time to bump up your contributions to your 401(k), traditional IRA, or HSA. Here is why this matters for your taxes: contributions to a traditional 401(k) or IRA reduce your taxable income for the year. So if you contribute an extra ,000 before December 31, that is ,000 less that gets taxed. Depending on your tax bracket, that could mean 20 to 70 less in federal taxes.
HSA contributions are even more powerful because they are triple tax advantaged: pre tax going in, tax free growth, and tax free withdrawals for medical expenses. Even a small increase in contributions between now and year end can make a meaningful difference on your tax return.
Move 3: Harvest Investment Losses
If you have investments in a taxable brokerage account that have lost value since you bought them, you can sell them to realize that loss. That loss can then offset any investment gains you have realized this year, reducing the amount of capital gains tax you owe.
For example, if you sold a stock for a ,000 gain earlier this year, and you have another investment sitting at a ,500 loss, selling that losing investment brings your net taxable gain down to just 00.
One important rule to know: the wash sale rule. You cannot buy back the same or substantially identical investment within 30 days before or after the sale, or the loss will be disallowed. But you can immediately buy a similar (not identical) investment to maintain your market exposure.
Take Action Before December 31
These three moves are time sensitive. The closer you get to December 31, the less time you have to act. Put a reminder on your calendar for October or November to revisit your W4, your contribution levels, and your investment portfolio. Small intentional actions now can add up to real savings by April. Your future self will thank you for paying attention in June.