What Year-Round Tax Planning Actually Looks Like, February to December

Ask most people when tax planning happens and they will describe a meeting in the second week of December, or a phone call from the CPA in March asking whether there is anything else to report. Both are real, and neither is planning. The work that actually lowers a household’s lifetime tax bill is spread across the whole year, and it has a shape: two proactive meetings that anchor it, one in February and one in August, and two execution windows around them, filing season and the last weeks of the year. This article walks that calendar from the client’s chair. It is the companion to two pieces already on this site: what a tax strategist is, which covers the role, and the multi-year tax projection, which covers the model. Here the question is narrower and more practical: in a year of tax strategy, what happens, when, with which documents, and what should you expect to see at the end of it?

As always, this is educational rather than prescriptive. The calendar below is the pattern; the amounts and the decisions inside it belong to a specific household’s numbers.

The Two Meetings That Anchor the Year

The calendar is built around two dates, and the logic of each is timing.

February is when the prior year is nearly final and the new year is nearly blank. The 1099s are in or arriving, the business results are known, and the contributions that can still be made for the prior year remain open: an IRA or HSA contribution until the April 15 filing deadline (an extension does not stretch it), and an owner’s employer plan contribution until the business’s return deadline, including extensions. It is the last moment to close the old year cleanly and the first moment to set the new one on purpose.

August is when the current year is knowable and still changeable. Eight months of income are on the books, the rest is forecastable, and every large move that will define the year (a conversion, a harvest, a charitable bunch, an entity or compensation change) still has four months of runway. A year-end plan made in August is made with real numbers and real time. The same plan made in December is made with real numbers and no time.

Everything else in the year, filing season in the spring and the execution window in December, is the follow-through on decisions those two meetings made.

February: Close the Prior Year, Cast the New One

The February meeting has three jobs: close the prior year, cast the new one, and make the early moves. Closing the prior year takes two steps.

Finalize the prior year. The projection’s estimate for last year is replaced with actuals: income by source, realized gains, business results, charitable contributions, estimated payments made. The reconciliation is the valuable part. Where the projection missed, why: a bonus that landed in the wrong year, a capital gain distribution nobody saw coming, a business that did better than budgeted. Each miss teaches the model something.

Confirm the prior year is complete. The contributions that carry a filing-deadline cutoff are made or scheduled: the IRA contribution, the HSA contribution, the SEP or profit-sharing contribution for an owner. The fourth-quarter estimate went in on January 15; February confirms it landed inside a safe harbor. The backdoor Roth contribution for the new year can go in now too, since a full year of growth is worth having. We lean toward making it a default annual move for households who cannot contribute directly, but only after checking the pro-rata rule, which looks at every traditional, rollover, SEP, and SIMPLE IRA balance the person converting holds on December 31 of the conversion year. The test runs person by person (a spouse’s IRAs do not count), and employer plan balances and inherited IRAs stay out of it. A rollover IRA or an old SEP left in place can turn what was meant to be a tax-free conversion into a mostly taxable one, and so can a 401(k) rolled into an IRA later in the same year, so the check comes first, every year, and has to hold through December.

Cast the new year. This is the forward-looking half. Two kinds of change get priced into the projection. The first is the law: a new provision, an expiring one, a changed threshold. The second is the family: an expected business sale, a retirement date, a child finishing school, a move, a large gift, an inheritance in process. Each changes the year’s marginal-rate picture, and the February meeting is where the year’s targets come out of it: the conversion room the brackets are expected to allow, the charitable plan, the withholding number, the estimated payment schedule, and whether this is a year to accelerate income or defer it.

Make the early moves. Some decisions only work if they are made early in the year. Withholding is reset by a new Form W-4 for anyone whose income mix changed. Plan elections are set before payroll runs: the 401(k) deferral limit for 2026 is $24,500, with an $8,000 catch-up at 50 and older ($11,250 instead for ages 60 through 63), and whether those dollars go traditional or Roth is a projection decision, not a default, with one exception set by law: starting in 2026, anyone whose prior-year FICA wages from the employer sponsoring the plan exceeded $150,000 must make any catch-up as Roth. An entity change, a new solo 401(k), or a restructured rental holding is decided now, because a mid-year change affects half a year and a December change affects almost none of it. An S corporation election is the sharpest case: to cover the current calendar year it generally has to be filed by March 15, two months and fifteen days in, so February is the last comfortable moment to decide it. The charitable plan has an early deadline of its own for anyone taking required distributions: withdrawals count toward the year’s required minimum distribution (RMD) in the order they happen, so a qualified charitable distribution (QCD) meant to satisfy part of it has to go out before other withdrawals use up the RMD, and the simplest way to guarantee that is to send it first.

Filing Season: The Return Review and the Handoff

The return is drafted in March or April, and in any year that carried a planning move it is worth reading against the plan before it is filed. Not to second-guess the preparer’s arithmetic, which is almost always right, but to catch the class of errors that come from missing information rather than bad math. The list is short and it recurs:

Basis. Form 8606 tracks nondeductible IRA contributions. When it is missing, or when the household changed preparers and the prior years’ Forms 8606 did not travel with the file (custodians do not track basis), a backdoor Roth conversion gets taxed twice: once when the contribution went in, again when it is reported as a fully taxable conversion. The return is the only place this shows up, and the preparer cannot know what nobody told them.

Charitable distributions. A qualified charitable distribution can arrive on the 1099-R looking exactly like an ordinary taxable IRA distribution. The IRS has added a distribution code for QCDs, but custodians are not yet required to use it and apply it inconsistently, so the form cannot be relied on to say which dollars went to charity. If the preparer is not told, the QCD is taxed and the household paid to give.

Carryforwards. Capital losses, charitable contributions above the deduction ceiling, passive losses, and unused credits all carry from year to year on schedules that only appear if someone carried them. A change of preparer is the moment they go missing.

Business items. The qualified business income deduction (including any aggregation election) and the Section 179 and bonus depreciation elections are return-level choices that should match the plan, and the W-2 wages on an S corporation return should match the reasonable-compensation split the plan assumed, since by filing season that number was set in payroll and can no longer change. When they do not, the question is whether the plan or the return is wrong, and the answer is not always the return.

The documents drive the timing. Brokerage 1099s arrive in February and are routinely corrected in March. 1099-Rs report the prior year’s IRA distributions and conversions, but the form shows amounts and a distribution code, not the story: it generally will not separate a conversion from any other withdrawal, and it never knows the household’s basis, so those facts reach the preparer from the household or not at all. K-1s from calendar-year partnerships and S corporations are due March 15, or September 15 if the entity extends, and a late K-1 is one of the most common reasons an individual return goes on extension. Form 5498, which reports IRA contributions, Roth conversions, and the year-end value, arrives after the filing deadline, and it confirms the contribution, not whether it was deductible, which is why basis has to live in the household’s own records rather than wait on the custodian.

Extensions belong here too. An extension is not a failure; it is a tool. A household waiting on a late K-1, or one that wants the SEP contribution decision made on final numbers, files the extension, pays the estimate of what is owed by April 15 (the extension moves the paperwork, not the payment), and files by October 15 with the numbers right.

August: Set the Stage for Year-End

The August meeting is where the year-end plan is made. Not executed, made. The distinction is the whole point of holding it in August.

Income against plan. Wages and bonuses are known. Equity compensation has a vesting schedule, and the stock price has moved the dollar value of every vest. Business owners have two full quarters and most of a third. Rental income and the timing of any property sale are firm. The projection is updated with actuals for the year so far and refined estimates for the rest, and the year’s marginal-rate picture, the one every year-end decision depends on, comes into focus.

The year-end plan, in ranges. With four months of runway, the large moves are set as ranges to be finalized on December’s numbers: the conversion amount the bracket room supports, the harvest candidates and what would replace them, the charitable structure and the amount that clears the standard deduction, the required distribution and whether a qualified charitable distribution should satisfy part of it, and any gain or income that should be pulled into this year or pushed into next. For a household in the gap years, this is where conversion pacing is decided: how much of the year’s room is already spoken for by certain income, how much remains, and whether a conservative first piece goes in early, with the rest sized in November or December against known income and a buffer below whichever line binds. For 2026, the lines to watch include two corridors from the One Big Beautiful Bill Act (OBBBA) where a marginal dollar costs more than its bracket: the senior deduction phaseout, which starts at $150,000 of joint modified adjusted gross income, and the SALT cap phase-down above $505,000, which matters to Texas homeowners carrying large property tax bills even without a state income tax.

Estimated payments. The second-quarter estimate was due June 15 and the third is due September 15. The safe harbor for households with prior-year adjusted gross income above $150,000 is 110% of the prior year’s tax, and that harbor cuts both ways: a household coming off an unusually high year can be paying far more than it owes, while a household whose income is climbing stays penalty-free on it but can face a large balance in April that has to be planned for. We walk through the harbor choices and the withholding rescue in our estimated taxes and safe harbor article; August is where that choice is worth revisiting against real numbers, ideally with the CPA who prepares the vouchers.

Owner decisions. For an S corporation owner, the reasonable-compensation split and the resulting retirement plan contribution capacity are August decisions, because payroll can still be adjusted across the remaining months, and a salary set by a consistent method during the year is easier to defend than a December bonus sized to the tax calendar. Anything structural that was not settled in February gets a final look now, while it can still affect the current year.

November and December: Execute on Near-Final Numbers

By November the year is mostly known, and the ranges set in August become amounts. This is the season people picture when they say “tax planning,” and it is the season the February and August meetings exist to make precise.

The Roth conversion. Sized to whichever line binds first (a bracket top, an IRMAA tier two years out, the ACA cliff for a household not yet on Medicare), using the income actually on the books and leaving a buffer below that line. Once Social Security has started, the guardrail we lean toward is to convert up to the tax torpedo, not into it, and whenever taxable cash is available, we lean toward paying the tax from it so the full amount reaches the Roth. The projection’s multi-year view decides how large this year’s piece should be relative to next year’s.

Loss harvesting. Realized losses offset gains and up to $3,000 of ordinary income, and the wash-sale rule governs what can be bought back, for 30 days on either side of the sale and in any account the household owns, IRAs included. We lean toward valuing a harvest against the projection rather than running it as a standing automated process, because a loss harvested into a year with no gains and a low bracket is worth less than it looks.

Charitable giving. A donor-advised fund contribution of appreciated stock, bunched into a year where the deduction clears the standard deduction, is one of the most common year-end charitable moves, and since 2026 bunching also helps the gift clear the new floor that makes the first 0.5% of adjusted gross income in itemized charitable gifts nondeductible. For anyone 70½ or older, a qualified charitable distribution of up to $111,000 per person for 2026 goes straight from the IRA to an operating charity (a donor-advised fund cannot receive one), never touches adjusted gross income, and, once distributions are required, counts toward the required minimum distribution, but only if it leaves the IRA before the rest of that year’s RMD. That is why the charitable portion is usually best sent early in the year rather than saved for December.

Required distributions. The RMD (age 73 now, 75 for those born in 1960 or later) must be out of the account by December 31; only the very first one can wait until April 1 of the following year, and waiting stacks two RMDs into one tax year. The order of operations matters: the first dollars out of an IRA each year count as the RMD, so any QCD meant to satisfy part of it goes first, and the RMD is complete before any conversion, because a conversion cannot be made from dollars that were required to be distributed. A December QCD also needs lead time: the deadline has no extension, and one written from a checkbook IRA counts when the check clears, not when it is mailed.

Withholding rescue. Because withholding is treated as paid evenly through the year no matter when it happened, a December distribution with heavy withholding can cure an underpayment that estimates missed. It is the last lever on the year, and it works only if someone is watching the total.

Nearly everything above has the same deadline, December 31 (the fourth-quarter estimate is the exception, due January 15), and none of it can be undone in January. The rules fix the first steps and judgment sets the rest, so the order we lean toward is: any QCD and the rest of the RMD, then the conversion, then the harvest and the donor-advised fund gift against the updated numbers, then the final estimate or withholding. Reversing it produces a taxable RMD that should have been a QCD, a conversion partly made from RMD dollars that then has to be corrected as an excess Roth contribution, or a penalty that a phone call in November would have prevented.

Who Does What: The Three Chairs

A tax strategy engagement has three seats at the table, and the households that get the best results are the ones where each seat knows which decisions are its own, and when. The calendar above is really a schedule of handoffs: the planner’s chair is busiest at the February and August meetings, the CPA’s from February through April and again before the October extension deadline, and the attorney’s whenever a February decision needs a document before it can take effect.

The planner models and recommends sizes, and the household decides. The multi-year projection, the marginal-rate analysis, the conversion amount, the harvest decision, the charitable structure, the entity and compensation design, the account-sequencing plan: these are planning decisions, made on the household’s whole balance sheet, and they are the strategist’s job. So is coordination, which mostly means making sure the other two chairs are working from the same numbers.

The CPA prepares and files. The return, the estimated payment vouchers, the safe harbor election, the extension, the state filings, the entity returns, and the response when a notice arrives. The preparer also owns the technical accuracy of how a strategy is reported: the Form 8606, the QCD coding, the depreciation schedules. We do not prepare returns ourselves; we would rather work alongside a preparer who does that job every day than try to replace one.

The attorney documents. Entity formation and elections, operating agreements, buy-sell provisions, trust drafting, beneficiary designations that a plan depends on. A tax strategy that requires a document nobody drafted is a plan on paper only.

The failure mode is not a bad professional in any chair. It is three good professionals, each optimizing the piece in front of them, with nobody holding the whole. A return prepared to minimize this year’s tax will do exactly that, and can defer a larger bill into the RMD years. A conversion sized without telling the preparer produces a return that reports it wrong. An entity restructured without the projection changes the tax picture in ways the plan never priced. One household, one set of numbers, and one person responsible for the whole picture: that is the engagement.

What You Should Expect to See

The test of a tax strategy engagement is not the meeting count. It is whether the work leaves a trail you could hand to someone else, and whether that trail runs longer than one year.

A horizon measured in years, not a return. The projection should look out across the whole arc of the household’s controllable-income years, often a decade or more, sometimes the rest of a working life and a retirement together, and it should be revisited whenever the facts change and at least twice a year. A plan that only ever looks at this year’s return will minimize this year’s tax, which is a different thing from minimizing the tax a household pays over its life.

Decisions with amounts and deadlines attached. When the year-end moves are made, they should exist in writing with a dollar figure and a date: the conversion amount, the required distribution, the charitable distribution, the lots harvested, the final estimate or withholding change. A decision without a number is a hope.

Whatever the preparer needs to report it correctly. Conversion confirmations, the coding on the 1099-Rs, charitable acknowledgments, harvested-loss records, basis records for Form 8606, and a plain summary of what was done and why. The preparer cannot report what nobody told them, and a strategy reported wrong is worse than no strategy.

The next year’s starting point. Withholding, plan elections, the estimated payment schedule, and the conversion room the coming year is expected to have, so February starts from a plan rather than from scratch.

The form these take will differ from firm to firm and household to household. What should not differ is the substance: a multi-year model, written decisions, a clean handoff, and a starting point for next year. An engagement that produces none of that is a conversation, and a conversation, however good, does not compound.

How We Think About It

We lean toward two proactive meetings as the spine of the year, February and August, rather than one meeting in December. February is where the prior year gets closed properly and the new year gets cast; August is where the year-end plan is actually made, with enough information to size it and enough time to execute it. December is for finalizing numbers, not for deciding strategy, and a year-end meeting with nothing set up in August has to make every decision at once, on a deadline.

The return deserves a second look in the years that carry planning moves: a conversion, a backdoor contribution, a charitable distribution from an IRA, an entity change. The year-end window is where the dollars move, but the return is where a basis mistake or a mis-coded QCD shows up, and either one can cost more than most of what December gained. Making sure the preparer has what it takes to report those moves correctly is some of the cheapest tax work there is.

We lean toward planning tax over many years, often decades, never one year at a time. The February and August meetings decide this year’s moves, but each move is measured against the years ahead: the years before required distributions start, the years after they do, the year a business sells, the years a surviving spouse files alone. A move that saves tax this year but costs more over the next decade is a mistake, and the only way to catch it is to model the decade.

And we lean toward the planner, the CPA, and the attorney working from the same facts. When a year includes a conversion, a charitable distribution, or an entity change, the CPA should know what was done and why before the return is prepared, because a move reported wrong can erase its value. The coordination is not overhead on the strategy. It is part of the strategy.

Common Questions

When does tax planning for a year actually start?

In February, with the prior year closed, the new year cast, and the early moves made: withholding, plan elections, entity changes, the backdoor Roth contribution. Not in December, when most of the year’s income is already fixed. The December work is real, but it only sizes what the February and August meetings made possible, and several of the largest levers have to be set before the year is mostly over.

What should I give my CPA after a year with a Roth conversion or a QCD?

A plain summary of what was done and why, with the paper behind it: the conversion confirmation, the Form 8606 basis history for any nondeductible IRA contributions, the charity’s acknowledgment for each qualified charitable distribution, and records of any harvested losses. The 1099-R reports amounts and a distribution code, but it generally does not single out a conversion, cannot be relied on to flag a QCD, and never shows the basis in an IRA, so those facts reach the return only if someone sends them. The time to send them is before the preparer starts the return, not after the draft arrives.

What should I bring to a mid-year tax planning meeting?

Year-to-date pay stubs with withholding, any bonus or equity vesting schedule for the rest of the year, business profit and loss through the latest quarter, brokerage realized gains and losses to date, confirmation of estimated payments made, and any life change on the horizon: a sale, a retirement date, a move, a large gift. The point of an August meeting is to replace February’s estimates with actuals and set the year-end plan on them, so the inputs are what matter.

I want to start in December. Is it too late for this year?

Not too late to do the year-end work, and too late to do most of the rest. In December a strategist can still size a conversion, harvest losses, check the RMD, direct a QCD if the year’s RMD has not already been fully taken, and fix withholding, and those alone can be worth the engagement. What cannot be recovered is the earlier calendar: plan elections, entity changes, and compensation decisions. A December start is a good start; the full cycle begins in February.