Why Fall Is the Real Tax Planning Season for High Earners & Retirees
- John J. Diak, CFP®
- 11 minutes ago
- 6 min read
The biggest missed tax opportunities don't happen in December. They happen earlier in the year, when no one's looking. For high-income earners and financially independent retirees, fall offers a strategic window to make proactive tax decisions before the year slips away.
Starting in late September or October gives you time to run accurate projections, adjust estimated payments, and align your moves with broader financial goals. Wait until December, and you're competing with holiday travel, business demands, and limited availability from financial professionals.
The strategies that reward an early start are often the ones that rarely make headlines. Here are a few worth considering now, before opportunities begin to narrow.
Convert Traditional IRA Assets to a Roth
A Roth conversion can be a powerful tax strategy, particularly if you expect to be in a higher tax bracket later in life or want to reduce future required minimum distributions. By converting pre-tax funds from a traditional IRA to a Roth, you'll pay taxes now in exchange for tax-free growth and withdrawals later. But that upfront tax bill deserves careful consideration. Because the amount you convert counts as ordinary income, it could push you into a higher marginal tax bracket or affect other income-based thresholds if not properly timed. [1]
Many individuals opt to convert over several years or during lower-income periods to manage the tax implications. It's also smart to consider market performance; converting during a market downturn can lower the taxable value of the assets you're moving.
Just be mindful of the five-year rule: if you're under 59½, each conversion must remain in your Roth for five years before withdrawals are penalty-free. And while there are no income limits on conversions, accurate reporting is crucial to avoid costly surprises. [1]
Leverage a Mega-Backdoor Roth if Your Plan Allows
For high earners locked out of direct Roth IRA contributions due to income limits, the mega backdoor Roth offers a compelling workaround—if your employer’s 401(k) plan allows it. [2]
In 2026, you may be able to contribute up to an additional $47,500 in after-tax dollars beyond standard 401(k) limits and roll it into a Roth IRA or Roth 401(k), creating potential for substantial tax-free growth. Contribution caps, including employee, employer, and after-tax amounts, are $72,000 for those under 50, $80,000 for those 50+, and $83,250 for those aged 60 to 63, due to expanded catch-up rules.
But this strategy is complex. Your plan must allow both after-tax contributions and in-service rollovers. If not executed promptly, investment gains in the after-tax account could trigger future tax liability. Because of the many moving parts, coordinating with a financial advisor is essential to avoid costly missteps and optimize your long-term tax-free growth.
Transfer Wealth Through Strategic Year-End Gifting
Gifting is one of the most straightforward and tax-efficient ways to transfer wealth, and fall offers a well-timed opportunity to be generous with intention.
In 2026, individuals can gift up to $19,000 per recipient ($38,000 for married couples) without reducing their lifetime exemption. While this doesn’t reduce your current-year taxable income, it’s a valuable way to gradually reduce the size of your estate and help family members or loved ones with education, home buying, or other milestones. [3]
For example, a couple with three children and five grandchildren could gift a total of $304,000 this year without any estate tax impact. If you’re helping with education or medical expenses, remember that direct payments to schools or healthcare providers don’t count toward the annual gift limit. [4]
Time the Exercise of Stock Options with Tax Efficiency in Mind
If you hold non-qualified stock options (NQSOs), fall is a good time to evaluate your strategy. When you exercise NQSOs, the difference between your option price and the stock’s market value—the bargain element—is taxed as ordinary income and reported on your W-2. This tax liability applies whether you hold or immediately sell the shares, and it can also trigger Medicare and Social Security taxes. [5]
For high earners, timing matters. Exercising options strategically—before year-end and within a specific tax bracket—can help avoid pushing income into higher marginal rates. For example, if you're planning a same-day sale, any gain beyond the bargain element may count as a short-term capital gain.
Given the complexity and potential tax surprise, your financial advisor can help you understand your cost basis, reporting requirements, and how different sale timelines (same-day vs. long-term) affect your tax outcome.
Rebalance and Reduce Capital Gains Through Tax-Loss Harvesting
Tax-loss harvesting isn’t just about cutting losses; it’s about using them to your advantage. If some of your investments have underperformed, you have the option to sell shares at a loss for the purpose of offsetting capital gains elsewhere in your portfolio. For example, if you’ve realized $50,000 in gains from a recent business sale or stock appreciation, you might look to offset that with $50,000 in harvested losses. And if your losses surpass your gains, you can also deduct up to $3,000 against ordinary income, carrying forward any excess. [6]
Timing and replacement matter. Be aware of the 30-day wash-sale rule, which disqualifies a loss if you repurchase the same or a substantially identical security within that window. But if you make strategic swaps instead, such as replacing an underperforming stock with a similar exchange-traded fund (ETF), you can maintain exposure without triggering this rule. Incorporating harvesting into broader rebalancing efforts makes the strategy even more impactful.
Review Charitable Giving Strategy
Charitable contributions can deliver both emotional and financial rewards, especially when using appreciated assets instead of cash. [7]
New for 2026, those who choose to take the standard deduction can claim an above-the-line charitable deduction of up to $1,000 ($2,000 for married filers). If you choose to itemize instead, your qualified charitable contributions must exceed 0.5% of your AGI. For example, if you’re a married couple filing jointly with a $300,000 AGI, you may deduct any portion of your charitable contributions that exceeds $1,500. [8]
Donating long-term appreciated securities lets you deduct the fair market value (up to 30% of AGI) and avoid capital gains taxes. For individuals aged 73 or older, Qualified Charitable Distributions (QCDs) from IRAs—up to $111,000 in 2026—can fulfill RMDs without adding to taxable income. [9]
If you're managing a high-income year or planning a Roth conversion, contributions can help offset the added tax burden. For added flexibility, Donor-Advised Funds (DAFs) enable you to donate now, claim the deduction, and distribute gifts over time. DAFs also streamline complex gifts like restricted stock or private shares. And if your employer offers charitable gift matching, leveraging that benefit can amplify your impact even further.
Notably, the $1,000 charitable deduction available to non-itemizers generally excludes donations to DAFs and private foundations.
Don’t Overlook Your HSA and Open Enrollment Decisions
Although HSA and IRA contributions can be made up until Tax Day, open enrollment season is when most people make these funding decisions.
If you’re eligible for a high-deductible health plan, an HSA remains one of the most tax-efficient tools available. Contributions are deductible, grow tax-deferred, and can be withdrawn tax-free for qualified expenses.
In 2026, individuals can contribute up to $4,400 (or $5,400 if age 55+) and families up to $8,750 (or $9,750 if age 55+). Even if you don't expect large healthcare costs this year, using your HSA as a long-term investment vehicle can complement your retirement plan, especially if you pay for smaller expenses out-of-pocket.[10]
Finish the Year with Confidence
Taken together, these strategies can add up to significant tax savings, stronger portfolio positioning, and a more intentional financial future. The earlier you start, the more effectively you can coordinate with your advisory team—and wrap up the year with clarity and purpose.
Now’s the time to take the lead on your year-end planning. Reach out to us to explore which tax strategies make the most sense for your situation before fall opportunities slip away.
Sources:
John J. Diak, CFP® is the Principal & Client Wealth Manager at Oatley & Diak, LLC in Parker, Colorado. He assists clients through many difficult lifestyle changes such as business downturns, retirement planning, divorce, the death of a spouse, and family estate issues among others. Oatley & Diak, LLC is a family-run registered investment advisory (RIA) firm that provides clients with investment management and financial planning services in a hands-on, intimate environment. Learn more about them at oatleydiak.com.
This material has been prepared in collaboration with Crystal Marketing Solutions, LLC, and has been edited with the assistance of artificial intelligence tools. The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.
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