The market may have had a relatively quiet week, but one economic report got our attention.
Non-farm payrolls came in dramatically stronger than expected, reinforcing the strength of the labor market. That’s good news for the economy, but it also increases the possibility that the Federal Reserve could raise interest rates rather than cut them.
While we’re watching what the Fed does next, there’s another issue investors should be thinking about right now: 2026 taxes.
If you wait until December to start tax planning, you may already be too late.
Tax Planning Should Happen Before Tax Season
There’s an important difference between tax preparation and tax planning.
Tax preparation looks backward. You gather your W-2s, statements, receipts, and other documents and determine how much tax you owe.
Tax planning looks forward.
We want to identify strategies while there’s still enough time to actually implement them. Roth conversions, qualified charitable distributions, donor-advised funds, charitable gifts of appreciated securities, and other strategies can require time to process. Waiting until the final weeks of December can leave investors without enough time to act.
Our goal is to have these conversations now, not when the calendar is running out.
Roth Conversions Deserve an Annual Review
A Roth conversion can be a powerful planning tool, but it isn’t automatically the right decision every year.
The question is whether converting some traditional retirement assets today makes sense based on your current tax bracket, expected future income, retirement plans, and other financial circumstances.
That requires planning.
We would rather evaluate the opportunity early, determine whether it makes sense, and have plenty of time to execute than discover an opportunity after the year has already ended.
Charitable Giving Can Be More Strategic
For investors who are already planning to give to charity, the way those gifts are made can matter.
If you own highly appreciated stock, donating shares rather than selling them and donating the cash may allow you to avoid realizing the embedded capital gain while still supporting the organization.
A donor-advised fund can also allow investors to make a larger charitable contribution in one year and distribute those funds to individual charities over time.
The point isn’t to give money away simply for a tax deduction. It’s to make the giving you’re already planning as tax-efficient as possible.
Don’t Forget Tax-Loss Harvesting
Market pullbacks aren’t always bad news.
In taxable brokerage accounts, we can sometimes use investments that have declined to realize losses that offset gains elsewhere in the portfolio.
We call this tax-loss harvesting.
Markets naturally experience periods of volatility. When appropriate, we can use some of those declines strategically while rebalancing the portfolio and managing the investor’s overall tax exposure.
Higher-Income Investors May Have Additional Options
Accredited investors may also have access to investment strategies that aren’t available to everyone, including certain real estate, energy, equipment leasing, and other private investments.
Some of these investments can have meaningful tax characteristics in addition to their investment potential. They can also be more complicated and carry different risks, which makes evaluating whether they fit the investor’s broader financial plan particularly important.
Tax benefits alone should never be the reason to make an investment.
Meanwhile, the Economy Remains Strong
The backdrop for all of this remains surprisingly resilient.
The latest employment report showed job creation substantially exceeding expectations, with unemployment remaining very low. Despite ongoing concerns about AI replacing workers, we aren’t seeing widespread displacement reflected in the employment numbers. Instead, we continue to see AI being used as a productivity tool across industries.
The S&P 500 has also been consolidating after its August advance rather than experiencing a major decline.
That leaves us watching the Federal Reserve closely while continuing to look for opportunities in the market.
The Bigger Picture
You can’t control what the Federal Reserve does next.
You can’t control where the market finishes the year.
But you can control whether you plan ahead.
Tax strategy is part of investment strategy, and September is a much better time to start these conversations than December 20th.
We want to know what opportunities are available, determine which ones actually fit your situation, and have enough time to execute them properly. That’s what proactive financial planning should look like.
At WealthGuard Advisors, we focus on disciplined portfolio management, risk control, and long-term positioning tailored to your specific goals. If you want a second opinion or a more structured approach to navigating markets like this, we are here to help.
This content is based on a recorded discussion by WealthGuard Advisors and has been edited and formatted with the assistance of artificial intelligence. It is provided for informational purposes only and should not be considered investment advice or a recommendation to buy or sell any securities.
