As the year draws to a close, most people are thinking about holidays and travel. But for tech professionals, this season brings something else that’s just as important: the final chance to make smart tax moves before December 31. This year is especially significant, with the One Beautiful Bill Act (OBBBA) introducing new limits and changes that will take effect in 2026. By acting before December 31, you can lower your 2025 tax bill and preserve valuable opportunities before they disappear.
At KB Financial Advisors, we can help with a year-end equity tax checklist for tech workers, founders, and startup employees, and help make sense of complex equity and tax rules. Here’s what should be on your radar as you wrap up the year.
1) Exercise ISOs Before Alternative Minimum Tax (AMT) Rules Change
If you hold incentive stock options (ISOs), now is the time to review your exercise strategy. The OBBBA will change how the alternative minimum tax (AMT) applies in 2026, and that could make exercising options more expensive later. By exercising before year-end, up to your AMT threshold, you can potentially capture long-term tax benefits under the current rules.
You can try out our free AMT calculator or work with your advisor to run a projection of how much you can safely exercise without triggering AMT. At KB Financial Advisors, we run these projections for every client to help them stay ahead of the curve. Understanding your AMT exposure early lets you decide whether exercising this year makes sense or whether waiting could lead to higher taxes down the road.
2) Catch Up on Estimated Taxes and Withholding
If you’ve had a big RSU vest or sold company stock this year, your taxable income likely spiked. That can throw off your estimated payments or withholdings and leave you facing penalties. Don’t wait until tax season to fix it. Make any additional estimated tax payments now, or adjust your withholding before your last paycheck of the year. Doing so can help you avoid unnecessary penalties and smooth your cash flow going into 2026.
3) Maximize Charitable Giving Before the New Limits Hit
Charitable giving rules are also changing in 2026. The OBBBA will introduce a floor of 0.5% of adjusted gross income (AGI) before charitable deductions can count, and it will also reduce the top deduction rate for high earners from 37% to 35%. That means 2025 is the last year to make fully deductible gifts under current, more favorable rules.
If you’re planning a large donation, consider “bunching” several years’ worth of giving into 2025. A donor-advised fund (DAF) can be a powerful way to do this. You get the deduction now, but you can decide where to give later. For tech professionals with liquidity from an IPO or tender offer, this can also help manage a sudden jump in taxable income while supporting causes you care about.
4) Make the Most of the SALT Deduction Window
The OBBBA also affects how much state and local tax (SALT) you can deduct. If your income is under $500,000, you may be able to deduct up to $40,000 in property or state taxes this year, but that opportunity vanishes once income exceeds $600,000.
For homeowners in states with lower or no income tax, such as Texas, Colorado, or Washington, this could be a valuable one-year window to reduce taxable income. Make sure your property tax payments are completed by December 31 to take advantage of the expanded limit, which still applies.
5) Use Your Annual Gifting Exclusion
If you’ve been thinking about helping out family members or setting up gifts for children, the annual gift exclusion remains a simple and effective way to transfer wealth. For 2025, you can gift up to $19,000 per person (or $38,000 as a couple) without tapping your lifetime estate tax exemption. Making those gifts before December 31 allows you to start fresh on January 1, doubling your impact. It’s a small but meaningful step toward long-term wealth transfer and family planning.
6) Review Your Portfolio for Tax Loss Harvesting
Another year-end opportunity involves your investment portfolio. If you have holdings sitting at a loss, selling them before year-end can offset capital gains elsewhere and reduce your taxable income. This strategy, known as tax loss harvesting, can be particularly effective for high-income earners in tech who’ve realized gains from equity sales or exercised stock options.
The key is timing: avoid buying back the same security within 30 days to comply with the IRS wash-sale rule. Done right, this approach can lower your short-term tax bill and position your portfolio for better after-tax growth in the future.
7) Wrap Up Energy Credits, HSA, and Retirement Contributions
If you’re planning energy-efficient home upgrades like solar panels or insulation, you’ll need to have both paid for and placed in service by December 31 to qualify for existing energy tax credits. Starting in 2026, some of these credits phase out or shrink, so now’s the time to finish any projects in progress.
Don’t forget about health and retirement accounts. If you have a high-deductible health plan, contribute to your Health Savings Account (HSA) before the end of the year or up to $4,300 for individuals or $8,550 for families, with an extra $1,000 catch-up if you’re over 55. HSAs are a rare “triple-tax-free” vehicle: contributions are deductible, growth is tax-deferred, and withdrawals for medical expenses are tax-free. They can be especially valuable for healthcare costs in retirement.
For those who earn too much to contribute directly to a Roth IRA, the backdoor Roth strategy still works: contribute to a non-deductible traditional IRA, then convert it to a Roth. This allows your money to grow tax-free over time and can be a smart way to diversify your future tax exposure.
Plan Ahead for a Smoother 2026
Many of these opportunities, from ISO exercises to charitable gifts and tax-loss harvesting, work best when planned proactively. Schedule a year-end review with your advisor to make sure everything is aligned: your tax plan, your investment strategy, and your long-term goals.
The changes coming in 2026 under the One Beautiful Bill Act will reshape the landscape for tech professionals, especially those with equity-based income. Acting now gives you control and flexibility; waiting may mean fewer options and higher taxes later.
At KB Financial Advisors, we help tech professionals and founders make confident decisions about equity, taxes, and long-term wealth. Whether you’re managing ISOs, RSUs, or post-IPO planning, we can help you design a year-end strategy that keeps more of what you earn and builds lasting financial freedom.
Book a discovery call today to start your year-end equity tax planning with confidence.
