Retirees Who Wait Until April to Think About Taxes Miss the Moves That Actually Save Money
Most retirees hand their tax preparer a finished picture in April, but the moves that actually shrink the bill all vanish on December 31. Here is what a 67-year-old couple can still do before the window closes, and exactly what…
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By the time most retirees sit down with a tax preparer in April, their 2026 return is already set. Nearly every move that cuts a retiree’s tax bill expires on December 31, 2026. By spring, all that’s left is writing down what happened.
Waiting has a price. Income that could have been taxed at 12% gets taxed at 22% later. A charitable gift charity by a retiree earns no deduction unless the applicable requirements are met. However, a qualified charitable distribution (QCD) frm an eligible IRA can provide a tax benefit without requiring the retiree to itemize deductions. A Medicare surcharge shows up two years down the road. Here’s what still works before year-end, and what each move is worth in dollars.
Which Retiree Tax Moves Expire on December 31
| Move | Deadline | Can You Still Do It in April? |
|---|---|---|
| Roth conversion | Dec. 31, 2026 | No |
| Qualified charitable distribution (QCD) | Dec. 31, 2026 | No |
| Required minimum distribution (after your first year) | Dec. 31, 2026 | No |
| Harvesting capital gains or losses | Last trading day of 2026 | No |
| Keeping MAGI under a Medicare surcharge level | Dec. 31, 2026 | No |
| 2026 IRA contribution (requires earned income) | April 15, 2027 | Yes |
A $37,500 Roth Conversion Window Closes at Year-End
Consider a married couple, both 67 and filing jointly for 2026. They have a $50,000 pension, $20,000 in IRA withdrawals and $48,000 in Social Security. Their income is high enough that 85% of their benefits, or $40,800, is taxable, the maximum under 26 U.S.C. § 86(a)(2). That puts their AGI at $110,800.
They get the $32,200 joint standard deduction, an extra $1,650 each for being over 65, and the new senior deduction of $6,000 per person. Together that’s $47,500, which leaves taxable income of $63,300.
For joint filers in 2026, the 12% bracket runs up to $100,800. That leaves $37,500 of room. If they convert that amount to a Roth IRA, the federal tax is $4,500. If required distributions later push those same dollars into the 22% bracket, the tax would be $8,250. That’s a $3,750 gap from a single year’s conversion.
The conversion raises their AGI to $148,300, just below the $150,000 joint line. Above that line, the senior deduction shrinks by 6% of the excess. Past it, each 12% dollar really costs about 12.72%. The senior deduction only applies to tax years beginning before January 1, 2029, so the quiet years between the last paycheck and the first required withdrawal are the cheapest ones to convert in (we sized up that window in a free guide here: The Roth Window).
Giving From an IRA Beats Writing a Check to Charity
Once you reach age 70½, you can send IRA money straight to a charity, and it never counts as income. The law sets the cap at $100,000 before inflation adjustments.
Take a single 74-year-old who claims the standard deduction and gives $6,000 a year. If she writes checks, she gets little or no deduction for them. If she gives through a QCD, the money counts toward her required distribution and stays out of her AGI. In the 22% bracket, that saves her $1,320. A lower AGI also helps with taxes on her Social Security, the senior deduction phaseout and Medicare premiums.
Your 2026 Income Sets Your 2028 Medicare Bill
Medicare sets Part B premiums using your income from two years earlier. Under the 2026 table, joint filers with MAGI up to $218,000 pay the standard $202.90 a month. Go one dollar over and each spouse pays an extra $81.20 a month. For a couple, that one dollar costs $1,948.80 a year. The 2028 income level haven’t been released yet.
December is when to add up your 2026 MAGI and shrink a conversion or capital gain that would push you over a level. If your income dropped because you retired, file Form SSA-44 to ask Social Security to use your current income instead.
One April Deadline That Can Backfire
If 2026 is your first required distribution year, you can wait until April 1, 2027 to take it. But your 2027 distribution is still due by December 31, so both land in one tax year. The penalty for missing a required distribution entirely is 25% of the shortfall. It drops to 10% if you fix it within the correction window.
A QCD Reporting Error Costs Retirees Every Spring
One frequent filing mistake involves QCDs. Form 1099-R usually reports the whole distribution as taxable and doesn’t mark the charitable part. You have to enter the gross amount on line 4a, enter the lower taxable amount on line 4c box 2 “QCD” of Form 1040. Skip that step and you pay tax on money you gave away.
How big a conversion fits your bracket is worth working out with a CPA or fiduciary advisor before December, while you can still change the numbers.
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Vilma Rios is a tax professional and tax content contributor with more than 15 years of experience in tax and accounting. She specializes in federal tax research, tax education, and translating complex tax rules into clear, practical information for individuals, families, and small-business owners.
Vilma is a Content Tax Contributor II with the National Association of Tax Professionals (NATP), where she contributes to tax education and professional content. She has also presented tax information through webinars, including Spanish-language tax education, and has appeared on Telemundo 47 discussing tax topics and helping viewers understand important tax-filing requirements.
Her experience also includes tax and accounting work, tax research, IRS-related matters, and public tax education. While in college, Vilma volunteered in an IRS-sponsored tax assistance program and was recognized for her community service by local and state officials.
Known as “Your Tax Geek,” Vilma is passionate about making taxes easier to understand and helping people navigate an increasingly complex tax system.
