Crypto Year-End Tax Planning 2026 – What to Do Before December 31

December 31 is not a soft deadline. Once that date passes, the window closes – and some of these moves can save you thousands. Here's exactly what to do before the year ends, in order of impact.

Why December 31 Is the Hard Deadline

No flexibility here. The US tax year is January 1 through December 31. Anything you sell, trade, or earn after midnight on December 31 belongs to next year's taxes. All your planning moves need to happen before that clock hits zero.

Action 1: Harvest Tax Losses (Before Dec 31)

This is the big one. Go through your entire portfolio and find positions where you're currently sitting at a loss. Sell them before December 31 to realize the loss – which then offsets your gains. Here's what makes crypto special: there's no wash sale rule. Sell Bitcoin at a loss today and buy it back tomorrow. The loss is still valid.

Practical note: Trades need to settle by December 31. Place orders by December 28–29 to be safe. Don't cut it to the last hour of December 31.

Action 2: Check Your Holding Periods

Pull up your portfolio and check acquisition dates on your biggest winners. If BTC bought on December 15, 2025 crosses the 12-month threshold on December 16, 2026 – waiting one extra day before selling drops your rate from 37% to 20% on that gain. On a $100,000 gain, that's $17,000 in your pocket for just waiting one day.

Action 3: Realize Gains in Low-Income Years

If your taxable income this year is under $94,050 (married filing jointly) or $47,025 (single), you're in the 0% long-term capital gains bracket. Sell your long-term crypto winners before December 31 and pay zero tax on those gains. Then immediately repurchase if you want to maintain exposure. You've reset your cost basis to a higher level at zero tax cost. Completely legal and extremely effective.

Action 4: Max Out Retirement Contributions

• Traditional IRA: Up to $7,000 ($8,000 if 50+) – deductible contributions reduce your taxable income directly
• Solo 401(k): Up to $69,000 if you're self-employed – one of the most powerful tools available
• SEP-IRA: Up to 25% of net self-employment income

Lower taxable income can drop you into a lower capital gains bracket. Every dollar you contribute here is a dollar that doesn't get taxed this year.

Action 5: Donate Appreciated Crypto to Charity

If you're charitably inclined anyway, this is a no-brainer. Donating long-term appreciated crypto directly to a 501(c)(3) charity before December 31 means: zero capital gains tax on the gain AND a deduction for the full current market value. Strictly better than selling and donating cash.

Action 6: Gift Crypto to Family

Got family members in lower tax brackets? Gift them appreciated crypto. Each person can give up to $18,000 (2026 annual exclusion) to any individual without gift tax implications. Family members in the 0% long-term bracket can then sell the crypto without paying any capital gains tax at all.

Year-End Checklist

• ☐ Identify all unrealized losses – harvest before Dec 31
• ☐ Check holding periods on large gains – wait for long-term if close
• ☐ Estimate total taxable income – verify if 0% LTCG rate applies
• ☐ Max out retirement account contributions
• ☐ Donate appreciated crypto if you give to charity anyway
• ☐ Export all transaction records and import into crypto tax software

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