Your family decisions have tax deadlines. Most people find out in April, when it's too late to do anything about it.
The IRS uses one day to decide whether you're married for the whole year: December 31. It uses the calendar year to decide whose bracket a dollar lands in. A few moves before the year closes can shift real money, and a few mistakes can cost it.
Here are the five I walk families through every December.
If your children helped in the business this year, pay them a real wage, through payroll, by December 31.
In a sole proprietorship or a partnership owned only by the child's parents, wages to a child under 18 skip Social Security and Medicare. Your business deducts the wages. Your child can earn up to $16,100 in 2026 without owing federal income tax, and can put up to $7,500 into a Roth IRA.
Pay them on a W-2, not a 1099, and keep time sheets. The full rules, including what changes for S corps, are in Putting Your Kids on Payroll: The 2026 Playbook.
If you're married on December 31, you're married for the whole year. If your divorce is final by then, you're single for the whole year.
For many couples, filing jointly still costs less than filing as two singles. So if a divorce is close, it can pay to finalize it in January instead of December. Run your 2026 taxes both ways before you pick a date. It takes some time, and it can be worth thousands.
That only helps if the two of you can still sign a joint return. Signing one makes each of you responsible for the whole tax bill, so talk to your divorce attorney before you agree to it.
If you are still married on December 31, don't default to filing separately. It's usually the most expensive way to file, and it shuts you out of several credits.
Watch the alimony rules too. For divorce agreements signed after 2018, the person paying alimony gets no deduction, and the person receiving it doesn't pay tax on it. Older agreements keep the old rules unless they're changed to adopt the new ones. California never adopted this change, so alimony is still deductible on a California return.
Not sure which date costs you less? Book a free strategy call and we'll run it both ways with you.
The same December 31 rule works in reverse. Get married by December 31, 2026, and you file 2026 as a married couple.
When one spouse earns much more than the other, a joint return usually lowers the total bill, so an earlier wedding date can save money.
When both of you earn well and itemize, marriage can cost you. The 2026 cap on state and local tax deductions is $40,400, and it's the same whether you're single or married filing jointly. Two single homeowners each get their own cap. A married couple shares one.
Say you each pay $30,000 a year in California income and property taxes. As two single filers, you deduct $60,000 between you. Married, you deduct $40,400. That's $19,600 of deductions gone. The cap also starts to shrink above $505,000 of income, and that threshold is the same for singles and couples.
Run your numbers before you book the venue for December.
Unmarried co-owners can deduct more mortgage interest than a married couple.
For a mortgage taken out after December 15, 2017, interest is deductible on up to $750,000 of debt, and that limit is now permanent. For unmarried co-owners, a federal appeals court applied that limit to each person, not each house, and the IRS has said it will follow that ruling. Two unmarried owners can deduct interest on up to $1.5 million of mortgage debt between them. Married, the limit for the two of you is $750,000.
For mortgages from before December 16, 2017, the limit is $1 million, again for each unmarried owner.
This only helps if you itemize, and it's never a reason by itself to stay single. But if your mortgage is large, put it in the math.
If you help support a parent or another family member, giving them appreciated stock can beat giving cash.
For 2026, long-term capital gains are taxed at 0% for single filers with taxable income up to $49,450, and up to $98,900 on a joint return. If your mother is in that range, she can sell gifted stock and pay no federal capital gains tax. Your basis and your holding period carry over to her.
Say you bought stock for $4,000 and it's worth $19,000 today. If you sold it yourself in the top bracket, you'd owe about $3,570 in federal tax on the $15,000 gain (20% plus the 3.8% net investment income tax). Give her the stock instead, and she may owe nothing on the sale.
A few things to check first:
This doesn't work with most children. The kiddie tax taxes a child's investment income over $2,700 at the parents' rates, and it can apply until a full-time student turns 24.
Most of these decisions get made at the kitchen table, not at the accountant's desk. Bring us in before the date is set, not after. If you want help running your numbers, book a free strategy call.
For the business moves on the same deadline, see the year-end tax moves checklist for business owners.
To your ongoing success,
Laura
Yes. Your marital status on the last day of the year sets your filing status for the whole year. A December 31 wedding means you can file a 2026 joint return.
You can, but it usually costs more. Married filing separately has its own brackets and shuts you out of several credits. Run both ways before choosing.
Not for divorce or separation agreements signed after 2018. The payer gets no deduction and the recipient doesn't report it as income. Agreements signed before 2019 keep the old rules unless they're modified to adopt the new ones.
$19,000 per person. Married couples can give $38,000 per person by splitting gifts, which generally requires a gift tax return to elect.
Usually not. The kiddie tax can apply until a full-time student turns 24, and it taxes a child's investment income over $2,700 at the parents' rates.
This is general information, not tax or legal advice. Whether a move works for your family depends on your income, state, and the timing of each decision. Talk to your tax advisor about your situation.
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