Don't wait until next April to lower your tax bill. 6 tax moves to make now.

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If you want to lower your tax bill next year, the best time to start planning is now, not when you sit down to file next year.

Some moves can reduce your taxable income, while others can help you capture deductions or make more tax-efficient choices with investments. But you usually can’t snag these tax breaks at the last minute. The IRS looks at your activity from Jan. 1 to Dec. 31 of the prior year. So do your future self a favor and prepare next year’s taxes now. Here’s how.

A lower tax bill comes from making a series of smart decisions throughout the year. Here are six tips to help you prepare for next year’s tax filing.

Did you end up owing more than expected this year? Or did you get a big refund, but want your paychecks to be larger throughout the year? You might want to check your tax withholding at work and adjust it with a W-4 form.

Federal income tax withholding determines how much tax is withheld from each paycheck. Here’s how it works:

If too little is withheld, you could face a tax bill or, in some cases, an underpayment penalty.
If too much is withheld, you may receive a bigger refund, but you’re giving up access to that money throughout the year while Uncle Sam holds onto it (without interest).

This step can be especially important after major life events, like getting married or having a child, or if you’re working multiple jobs at once.

You don’t have to wait to adjust your withholding — you can submit a new W-4 whenever your situation changes.

Download Form W-4 from the IRS, fill it out, and send it to your company’s payroll or HR. Some employers also let you adjust withholding directly through an employee portal.

If you’re not sure how to adjust your W-4, use the IRS Tax Withholding Estimator to calculate your withholding.

One of the most straightforward ways to lower taxable income is to contribute more to tax-advantaged retirement accounts.

If you contribute to a traditional 401(k) or traditional IRA, you’re reducing your taxable income and saving money for your future self at the same time.

For 2026, the 401(k) employee contribution limit is $24,500, while the IRA contribution limit is $7,500. People age 50 and older get even higher contribution limits. Lowering your taxable income that much can help you qualify for credits, deductions, and other tax breaks that phase out at higher income levels. It also reduces how much of your money gets exposed to taxes in the first place.

Small business owners often get hit with high tax bills. Additional retirement account options exist for this group — including Solo 401(k)s and SEP IRAs. Already contributing to one of these accounts? Increasing your contributions by 1% to 2% can reduce taxable income by hundreds of dollars next year.

Health and dependent-care accounts can also reduce your taxable income, but they work differently and aren’t automatically a good fit for everyone.

A health savings account (HSA) lets eligible people with a qualifying high-deductible health plan contribute pretax money for medical expenses. Contributions can reduce your taxable income, along with other tax perks, like tax-free withdrawals for medical expenses.

For 2026, the HSA contribution limit is $4,400 for self-only coverage and $8,750 for family coverage.

A healthcare flexible spending arrangement (FSA) can also lower taxable income. For 2026, the health FSA contribution limit is $3,400. To be clear: An HSA or FSA isn’t right for everyone. If you have chronic illnesses or high medical costs, a high-deductible health plan may not be the best choice for you.

Meanwhile, a dependent care FSA can be used to pay for eligible childcare or adult dependent care expenses, including day care, before- and after-school care, and summer camp. In 2026, the dependent care FSA annual limit is $7,500 per household, or $3,750 for married taxpayers filing separately.

If you know you’re going to pay $3,000 in day care costs this year, it can make sense to periodically fund a dependent care FSA and trim your taxable income next year in the process.

Not everyone needs a shoebox full of receipts anymore.

Most taxpayers take the standard deduction, and for 2026, that deduction is $16,100 for single filers and $32,200 for married couples filing jointly.

If you’re not itemizing and you don’t have business income, obsessively tracking every minor expense likely won’t move the needle at all.

But if you choose to itemize, own a small business, freelance, or have rental income, documentation matters. Staying organized can be as simple as the following:

Create a dedicated tax folder in Google Drive or Dropbox along with a simple monthly spreadsheet in Google Sheets or Excel. Set aside an hour or two each month to log your expenses and income.
Use receipt-scanning apps built into accounting tools: Examples include QuickBooks, FreshBooks, and Expensify, which can help store receipts digitally and keep them tied to specific expenses.
Get bookkeeping software like Wave, which has a free accounting tier for income and expense tracking.
Try QuickBooks Solopreneur: Connect business accounts and help categorize transactions.

Waiting until next spring to reconstruct a year’s worth of expenses from memory is how mistakes get made, and deductions get missed. Getting organized now can save you from frantically searching your files when your tax preparer requests additional info.

A few commonly missed or poorly documented write-offs and itemized expenses include:

Mortgage interest and property taxes: This is usually reported on forms, but you still want records for accuracy, especially if you recently bought your home or a new property.
State and local taxes: If you itemize, you might decide to claim the SALT tax deduction next year. Your preparer or tax software may need records showing state income tax withheld on your W-2, proof of estimated state tax payments, property tax bills, and payment confirmations.
Business mileage: Mileage logs matter if you run a business. For 2026, the standard business mileage rate is 72.5 cents per mile. The best way to document it is with a log that records the date, destination, business purpose, and miles driven — whether in an app, spreadsheet, or notebook.
Home office expenses for the self-employed: This is based on the square footage in your home dedicated to your workspace. But it needs to be substantiated.
Supplies, software, subscriptions, and professional services for freelancers or small businesses: Small charges add up, and they’re easy to miss if your accounts are mixed together.
Child care and dependent-care expenses: If you’re claiming a dependent-care tax break or using a dependent-care FSA, keep invoices, payment records, and the provider’s name and service dates.

You should hold on to your tax returns and the records used to prepare them for a few years. In general, the IRS says to keep records for at least three years from the date you filed the return, though some taxpayers need to keep them longer.

If you own a regular brokerage account (AKA an investment account with no tax peaks), there are a few simple moves you can make to reduce what you owe next year.

First, how long you wait before selling an investment matters.

Long-term capital gains tax rates apply to investments held for one year or longer, and those tend to be lower than short-term capital gains rates, which are based on your tax bracket. (A capital gain is what you pay when you make a profit by selling an investment.)

Most people fall into the 15% long-term capital gains tax rate. In contrast, single filers making between $50,401 and $201,775 will pay a tax rate of 22% or 24% on short-term capital gains.

On the flip side, strategically selling stocks at a loss can help offset your gains. If your investment losses are larger than your gains, you can deduct up to $3,000 of that excess loss from your income each year. If your losses are higher than that limit, you don’t lose the benefit — you can carry the remaining losses forward and use them to reduce taxes in future years.

So if you take profit early in the year, it might make sense to trim some dead weight from your portfolio in the fall. It’s a strategy known as tax-loss harvesting, and it’s one way to help minimize your brokerage tax bill.

Crypto investors also need to pay closer attention to tax reporting. People who sold digital assets through a broker or exchange will receive Form 1099-DA. For most crypto sales on or after Jan. 1, 2026, brokers generally must report cost basis for sales and conversions. In theory, this should make tax reporting easier.

However, basis reporting still won’t be complete in every case, especially when assets are moved across wallets or platforms. That means investors still need to track their own purchase dates, cost basis, and transfer history.

A lot of tax surprises start as life changes. Here are some tax moves and considerations to keep on your radar if you’re going through a major life change:

If your family grew (or is about to grow): Look at child-related credits and dependent-care benefits.
If you bumped up your freelance, side hustle, or gig work: Think about quarterly estimated taxes and deductible business expenses. Self-employed workers generally need to pay taxes four times throughout the year or face penalties.
If you retired or started drawing from accounts: Pay attention to required minimum distribution (RMD) rules. Fail to take an RMD, and you can get hit with a 50% penalty. However, the IRS may reduce that penalty to 10% if you fix your mistake within two years.
If you moved: Check out your new state’s tax laws, assuming it levies state income tax.
If your dependent turns 17: Once a child turns 17, the child tax credit can disappear even if they’re still your dependent. If they turn 17 in 2026, they’ll no longer qualify for the child tax credit when you file next year, so plan accordingly.

If you want to lower your tax bill next year, here’s what to put on your to-do list:

Check your withholding and update your W-4 if needed.
Increase traditional retirement account contributions when possible.
Use an HSA or FSA if you’re eligible (and it makes sense for your situation).
Track deductible expenses throughout the year if you itemize or earn self-employment income.
Review investment gains, losses, and holding periods before selling assets.
Reassess your tax situation after major life changes.
If you have freelance or gig income, review whether you need quarterly estimated tax payments.

Small adjustments now can result in real savings later. Ignore them, and you’ll likely pay for that decision next spring.

Don’t wait until next April to lower your tax bill. 6 tax moves to make now.