Time your income before year-end

November is your last practical opportunity to shift income and deductions between tax years. Whether you want to accelerate deductions into 2026 or defer income into 2027 depends on one thing: which year has the higher effective tax rate for your situation. In 2026, the answer is less obvious than usual—several OBBBA provisions create meaningful thresholds worth knowing before you act.

Strategy: Project your 2026 taxable income and AGI now. Identify which thresholds you are near, and determine whether crossing or staying below them changes your effective tax rate enough to justify action.

Here’s the whole story: Here are the key 2026 income thresholds that drive year-end timing decisions.

The QBI phase-out. The qualified business income deduction under §199A begins to phase out at $197,300 for single filers and $394,600 for joint filers. If your income is approaching those levels, deferring even a modest amount of income into 2027 can preserve a larger QBI deduction—worth up to 20% of qualified business income.

The Medicare surtax. The 3.8% net investment income tax and the 0.9% additional Medicare tax apply above $200,000 for single filers and $250,000 for joint filers. These thresholds are not indexed for inflation, so more taxpayers cross them every year. Staying below these thresholds by deferring income can save meaningful amounts.

The senior deduction phase-out. The OBBBA’s new $6,000 above-the-line deduction for taxpayers age 65 or older begins to phase out at $75,000 (single) and $150,000 (joint). Yearend moves that reduce MAGI—additional IRA contributions, deductible business expenses, or income deferral—can preserve part or all of the $6,000 deduction.

Social Security taxation tiers. The thresholds that determine whether 50% or 85% of Social Security benefits are taxable are not indexed for inflation. For retired business owners who control their business income, reducing provisional income below the 85% tier can shelter a meaningful portion of benefits from federal tax.

Accelerating deductions into 2026. If your income is higher this year than you expect next year, pull deductions forward: prepay business expenses, make charitable contributions, maximize retirement plan contributions, or consider a Roth conversion that fills—but doesn’t exceed— your current tax bracket.

Deferring income to 2027. If you expect lower income next year, push income later: delay billing clients until January, close a sale in 2027, or defer a bonus. Self-employed individuals have more flexibility here than employees.

Example: A married joint filer projects $148,000 in 2026 MAGI, just below the $150,000 senior deduction phase-out. Her husband, age 68, is entitled to the full $6,000 senior deduction. If she recognizes an additional $5,000 of income before year-end, the deduction begins to phase out, costing them roughly $264 in additional tax. Deferring that income preserves the full benefit.

Tip: Run a tax projection using your 2026 numbers before making any year-end move. Tax software or a conversation with your preparer takes an hour and can save multiples of that in unnecessary tax.