The holiday season is approaching, but before saying goodbye to 2026, completing a few tasks before December 31 can lower your tax bill or set you up for 2027 and beyond.
For Families saving for school, make sure 529 contributions are received prior to December 31st. Illinois taxpayers can deduct up to $10,000 for individuals or $20,000 for married couples filing jointly on state tax returns. Even families with students already in college, or past it, may still benefit from 529 contributions.
Park Ridge’s many Small Business Owners should consider opening an Individual 401(k) before year end if you don’t have employees other than a spouse. Its higher contributions limits, up to $83,250 depending on age, let you shelter more income and jump start your retirement. If you have 5 or more employees, Illinois may require you to offer a retirement plan anyway.
Many of our Park Ridge neighbors are Pre-Retirees or Retirees. Pre-Retirees, ages 50 through 65, have more to track than ever. The ability to make “Catch-Up” contributions to retirement accounts can lower your 2026 taxable income but must be done through your employer. This group has also started inheriting assets from loved ones and are discovering SECURE Act 2.0 rules and requirements for the first time. Depending on the account, you may need to take an annual distribution by December 31 and must fully empty inherited accounts within ten years. Missing a deadline can be costly.
Retirees have plenty to keep in mind before the 31st too. If you turned 73 in 2026, annual Required Minimum Distributions (RMDs) now apply to you. If you don’t need the additional income and already give to charity or are charitably inclined, a Qualified Charitable Distributions could help fulfill your RMD and exclude it from your taxable income, which can be especially valuable if you don’t itemize on your tax return.
Next Steps
Every household is different, and these rules have deadlines and exceptions that are easy to miss. A short conversation with a qualified tax professional or your financial advisor in the coming weeks could save you real money by spring.
This article is for general information only and is not tax or legal advice.
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