Denver Year-End Tax Planning for 2026: Maximize Your Savings Before April 15

With the 2026 tax season officially opening on January 26, denver year-end tax planning has never been more critical. The One Big Beautiful Bill Act introduced transformative changes affecting deductions, credits, and contribution limits. For business owners, real estate investors, and high-income professionals in Denver, the window to optimize your 2025 tax year is closing fast. This guide reveals the exact strategies, deadlines, and hidden opportunities that can save you thousands before April 15, 2026.

Table of Contents

• Key Takeaways
• Why Denver Tax Planning Matters Now
• How to Maximize Retirement Account Contributions in 2026
• What New Deductions Can You Claim Under OBBBA?
• How Can Strategic Capital Gains Planning Save You Thousands?
• What Tax Strategies Should Denver Business Owners Implement?
• How Can Real Estate Investors Optimize for 2026?
• Uncle Kam in Action
• Next Steps
• Frequently Asked Questions

Key Takeaways

• 2026 Filing Opens January 26: The IRS begins accepting 2025 returns on January 26, with an April 15 deadline for all filings.
• Increased Contribution Limits: Max out 401(k)s at $24,500 (up $1,000 from 2025), IRAs at $7,500 (up $500), with super catch-up available for ages 60-63.
• OBBBA Tax Benefits: New deductions include up to $25,000 in tip income, $10,000 car loan interest, and $6,000 for seniors over 65.
• Standard Deduction Increases: Single filers now get $15,750, married filing jointly $31,500—boosting average refunds substantially.
• Higher Earner Alert: If you earned $150,000+ from your employer in 2025, catch-up contributions must go to Roth 401(k)s, not traditional accounts.

Why Denver Tax Planning Matters Now in 2026

The 2026 tax season arrives with unprecedented complexity. Unlike prior years, the Trump administration enacted major tax law changes retroactively affecting your 2025 tax year. The IRS did not update payroll withholding tables, meaning most workers had taxes withheld at 2024 rates rather than 2026 rates. This creates a windfall refund situation for millions, but strategic planning ensures you maximize every dollar.

For Denver’s business owners, investors, and high earners, this timing is critical. Year-end tax planning typically focuses on December deadlines, but 2026 changes the game. You can still implement strategies in January, February, and March to reduce 2025 taxable income or position investments for 2026. The window closes April 15, so acting now is essential.

The IRS Workforce Challenge and What It Means for You

The National Taxpayer Advocate warned that the 2026 filing season could face delays. The IRS workforce declined 26% due to recent layoffs and buyouts. Processing times may extend beyond the typical 21-day refund window, particularly for returns claiming the Earned Income Tax Credit or Additional Child Tax Credit—those refunds are held until mid-February at the earliest, typically arriving around March 3, 2026.

What does this mean for your denver year-end tax planning? File early if you expect a refund. Don’t rely on quick refunds for major purchases or bill payments. If you owe taxes, plan to pay by April 15 to avoid penalties and interest.

How to Maximize Retirement Account Contributions in 2026

Maximizing retirement contributions remains the single most powerful tax strategy available. The 2026 contribution limits represent the highest in history, and the new super catch-up provision creates opportunities for workers approaching retirement.

The 401(k) Contribution Strategy for 2026

The maximum 401(k) contribution for 2026 is $24,500, representing a $1,000 increase from 2025. This applies to traditional pre-tax 401(k)s and Roth 401(k)s equally. When combined with employer matching (which doesn’t count against your $24,500 limit), you can shelter up to $72,000 total in employer-sponsored plans.

For those age 50 and over, the catch-up contribution limit increased to $8,000, up $500 from 2025. This brings the total you can contribute to $32,500 if you’re 50+ with an employer match.

But here’s the critical change for 2026 that affects Denver’s higher earners: If you earned $150,000 or more from your current employer in 2025, your catch-up contributions must go into a Roth 401(k), not a traditional pre-tax account. This means no immediate tax deduction for those additional $8,000 contributions, but the tax-free growth and withdrawal benefits of Roth accounts apply.

The New “Super Catch-Up” Opportunity for Ages 60-63

For the first time, employees aged 60 through 63 can make an additional “super catch-up” contribution of $11,250 to their 401(k) plans. This is separate from the standard $8,000 catch-up available to those 50 and older. A 62-year-old could contribute $24,500 (base) + $8,000 (catch-up) + $11,250 (super catch-up) = $43,750 in total employee deferrals for 2026.

This creates an unprecedented opportunity for workers in their final pre-retirement years to turbocharge savings. Combined with employer matches, some high earners can shelter nearly $100,000 from taxation annually.

Age Group	2026 401(k) Limit	Increase from 2025
Under 50	$24,500	+$1,000
Age 50-59	$32,500	+$1,500
Age 60-63	$43,750 (with super catch-up)	+$11,250 (new)

IRA Contribution Strategy and Phase-Out Ranges

Individual Retirement Accounts offer another powerful vehicle for reducing 2026 taxes. The traditional IRA contribution limit is $7,500 for 2026, with an additional $1,100 catch-up available for those 50 and older. That’s up from $7,000 and $1,000 respectively in 2025.

Critically, traditional IRA deductibility phases out at specific income levels. If you’re covered by a workplace retirement plan, your ability to deduct traditional IRA contributions depends on modified adjusted gross income. For single filers in 2026, the phase-out range is approximately $77,000-$87,000. For married filing jointly, it’s $123,000-$143,000.

Roth IRA contribution limits are identical ($7,500 + $1,100 catch-up), but income phase-outs differ. For 2026, single filers’ Roth contributions phase out between $146,000-$161,000 of modified adjusted gross income. Married couples phase out between $231,000-$241,000.

What New Deductions Can You Claim Under OBBBA?

For denver year-end tax planning, understanding OBBBA provisions is essential. These new deductions were retroactively applied to the 2025 tax year and are claimed on Schedule 1-A of the 2026 tax return (filed for 2025 income). Let’s break down each opportunity.

Tip Income Deduction—Up to $25,000

Service workers in Denver can exclude up to $25,000 of tip income from federal taxation for 2025. This applies to bartenders, servers, hairstylists, valet attendants, and others in occupations where tipping is customary. This is available regardless of adjusted gross income, though high earners may see phase-outs starting at higher income levels—consult the IRS guidance on Schedule 1-A for exact thresholds.

The benefit: If you earned $30,000 in tips during 2025, you can exclude $25,000, leaving only $5,000 subject to federal income tax. This is an above-the-line deduction, meaning it reduces your adjusted gross income.

Car Loan Interest Deduction—Up to $10,000

New for 2025 (claimed on 2026 returns), the car loan interest deduction allows workers earning under $100,000 (modified adjusted gross income) to deduct up to $10,000 in interest paid on loans for vehicles made in the United States. This is a significant benefit for Denver residents financing domestic vehicles.

Example: You financed a 2025 Tesla Model 3 (made in Nevada) with $15,000 in interest paid during 2025. You earned $85,000 adjusted gross income. You can deduct the full $10,000 car loan interest on your 2026 return.

Overtime Income Exemption—250 Hours

Up to 250 hours of overtime pay earned during 2025 is now exempt from federal income taxation. This benefits nurses, construction workers, transportation workers, and others earning overtime. Calculate your hourly overtime rate and multiply by hours over 40/week to determine your eligible deduction.

Senior Deduction—Up to $6,000 for Ages 65+

Taxpayers age 65 and older can claim an additional deduction of up to $6,000 for the 2025 tax year. This is available in addition to the increased standard deduction. The full $6,000 deduction is available if your modified adjusted gross income is $75,000 or less (single) or $150,000 or less (married filing jointly).

Important note: This deduction is available whether you itemize or take the standard deduction. This is NOT a repeal of Social Security taxation—it’s a separate deduction available to qualifying seniors.

How Can Strategic Capital Gains Planning Save You Thousands?

For Denver investors, strategic capital gains planning is often overlooked but extraordinarily powerful. Long-term capital gains are taxed at preferential rates: 0% for those in lower tax brackets, 15% for most taxpayers, and 20% for high earners. Plus, high-income taxpayers pay an additional 3.8% Net Investment Income Tax, bringing the combined rate to 23.8% for some.

Tax-Loss Harvesting Strategy

Tax-loss harvesting involves strategically selling investments at a loss to offset gains realized elsewhere in your portfolio. The benefit: you can deduct up to $3,000 of net capital losses against ordinary income each year, with excess losses carrying forward indefinitely.

Example: You sold Apple stock for a $5,000 gain but own a tech mutual fund down $8,000. By selling the fund at a loss, you offset the $5,000 gain completely and deduct the remaining $3,000 against ordinary income. You maintain equivalent market exposure by repurchasing similar (not identical) investments after 31 days, avoiding wash-sale rule violations.

Tax-Gain Harvesting for Low-Income Years

Conversely, if you’re in a low-income year (sabbatical, between jobs, early retirement), you can realize capital gains at the 0% rate. For 2026 filing (2025 income), the 0% capital gains bracket extends to $47,025 for single filers and $94,050 for married couples filing jointly.

Strategy: If your 2025 income falls in this range, intentionally sell appreciated investments, realizing gains tax-free. You increase your cost basis on those investments, reducing future capital gains taxes when you eventually sell.

Asset Location Optimization

Where you hold investments matters enormously for tax efficiency. Traditional IRAs and 401(k)s offer tax-deferred growth but tax ordinary income rates on withdrawals. Roth accounts offer tax-free growth and withdrawals. Taxable brokerage accounts are subject to annual taxes on dividends and gains.

Smart asset location places high-turnover, income-generating investments (bonds, dividend stocks, actively managed funds) in tax-deferred accounts. Growth stocks and long-term holdings belong in Roth accounts or taxable accounts (where long-term gains rates apply).

Investment Type	Best Account Location	Tax Rationale
High-dividend stocks	Traditional 401(k) or IRA	Defers tax on annual dividends
Growth stocks	Roth or taxable	Tax-free or long-term capital gains rates
Bonds	Traditional 401(k) or IRA	Interest taxed as ordinary income
Tax-efficient index funds	Taxable account	Low capital gain distributions

What Tax Strategies Should Denver Business Owners Implement?

Denver’s business owners face unique tax planning opportunities. Unlike W-2 employees, self-employed professionals can deduct business expenses dollar-for-dollar and shelter retirement income through higher contribution limits than traditional employees.

Maximize Legitimate Business Deductions

Self-employed individuals and small business owners can deduct reasonable and necessary business expenses. Common deductions include home office expenses, vehicle depreciation and mileage, equipment purchases, professional development, insurance, and contractor payments.

The IRS allows 100% deduction of business mileage at 72.5 cents per mile for 2026 (up 2.5 cents from 2025). Medical travel and charitable deductions remain at 20.5 cents and 14 cents respectively.

Home office deduction: Calculate your dedicated home office space as a percentage of total home square footage, then deduct that percentage of mortgage interest (or rent), utilities, insurance, and maintenance.

Solo 401(k) Strategy for Maximum Tax Deferral

Self-employed professionals with no other employees can establish Solo 401(k)s, allowing contributions up to 25% of net self-employment income (after self-employment tax adjustment) plus employee deferrals up to $24,500 (2026). Total annual contributions can reach $69,000+ for solo business owners, far exceeding traditional IRA limits.

Example: A Denver consultant earning $100,000 net self-employment income could contribute approximately $24,500 in employee deferrals plus $19,000 in employer profit-sharing, totaling $43,500 in tax-deferred retirement savings for 2026.

How Can Real Estate Investors Optimize for 2026?

Denver’s booming real estate market creates significant tax planning opportunities. Investors should be systematic in capturing available deductions and minimizing capital gains taxes when selling properties.

Depreciation and Cost Segregation

Rental property owners can deduct depreciation on buildings and improvement. For a $400,000 property with $100,000 land value, the remaining $300,000 is depreciable over 27.5 years for residential property, yielding approximately $10,900 in annual depreciation deductions.

Cost segregation studies accelerate depreciation by reclassifying certain property components as personal property (5-7 year depreciation) or land improvements (15-20 years) rather than building (27.5 years). For Denver investors with significant real estate holdings, cost segregation studies can generate six-figure deductions in early years.

1031 Exchange Strategy

When selling investment real estate, a 1031 exchange allows you to defer capital gains taxes by reinvesting proceeds into similar property. You have 45 days to identify replacement property and 180 days to complete the exchange.

Example: You sell a Denver rental property for $600,000 (original cost $300,000, gain $300,000). Normally, you’d owe capital gains tax on $300,000. Through a 1031 exchange, you defer that tax by purchasing a $600,000 replacement property, deferring potentially $40,000-$70,000 in taxes depending on your bracket and the 3.8% Net Investment Income Tax.

SALT Cap Planning for Real Estate Investors

For 2026 returns (2025 income), the SALT (State and Local Tax) cap increased to $40,000, up from $10,000. Denver real estate investors with high property taxes can now deduct up to $40,000 in combined state income tax, property tax, and sales tax. High-value Denver properties often generate property taxes exceeding $10,000, making SALT cap planning critical.

Uncle Kam in Action: Denver Business Owner Saves $31,400 Through Strategic Tax Planning

Client Snapshot: Marcus, 52, is a successful Denver software consultant earning $185,000 annually with $45,000 in net self-employment income from his consulting practice.

Financial Profile: Married filing jointly, two children under 17, owns a rental property generating $18,000 annual income, recently purchased a Tesla Model 3 with $14,000 in financing, and maintains a taxable investment portfolio with $12,000 in unrealized losses.

The Challenge: Without proactive planning, Marcus faced a $52,000 tax bill for 2025. He was leaving strategies on the table: he hadn’t maxed his 401(k), wasn’t utilizing his Solo 401(k) for consulting income, and wasn’t aware of the new OBBBA deductions or capital gains harvesting opportunities.

The Uncle Kam Solution: Our team implemented a comprehensive strategy:

• Maxed Solo 401(k) contributions at $24,500 employee deferral + $10,350 employer contribution = $34,850 (reducing self-employment income)
• Claimed $10,000 car loan interest deduction (newly available under OBBBA)
• Implemented tax-loss harvesting on the $12,000 portfolio loss against capital gains
• Maximized rental property depreciation deduction through cost segregation analysis
• This is just one example of how our proven tax strategies have helped clients achieve significant savings and financial peace of mind.

The Results:

• Tax Savings: Reduced tax liability from $52,000 to $20,600 through strategic planning
• Investment: Engaged professional tax strategy services with a one-time fee of $3,500
• Return on Investment (ROI): Saved $31,400 in first year = 8.97x ROI on the $3,500 investment, with continued benefits in future years through improved tax foundation

Next Steps for Denver Year-End Tax Planning in 2026

The window for 2026 tax optimization is narrowing rapidly. With the April 15 filing deadline approaching, now is the time to implement strategies. Here’s your action plan:

• Week 1: Gather 2025 financial documents: W-2s, 1099s, investment statements, property tax bills, and business expense records.
• Week 2: Review retirement contribution opportunities. If you can still contribute to 2025 IRAs, do so by April 15 deadline.
• Week 3: Implement capital gains harvesting strategies. Identify appreciated investments for Roth conversions or long-term holdings.
• Week 4: Consult a tax professional for entity structure review, depreciation optimization, and multi-year planning strategy.

Frequently Asked Questions

When Is the Final Deadline to File 2025 Tax Returns?

April 15, 2026 is the final deadline to file 2025 tax returns and pay any taxes owed. If you cannot file by this date, you can request an automatic six-month extension, moving your deadline to October 15, 2026. However, interest and penalties accrue on unpaid taxes from April 15 onward, regardless of filing extension.

Can I Still Make 2025 IRA Contributions After January?

Yes, you can contribute to traditional or Roth IRAs for the 2025 tax year until April 15, 2026. This applies to the regular contribution limit ($7,500) and catch-up contributions ($1,100 for those 50+). Plan to fund these accounts before the April 15 deadline to maximize your 2025 tax deductions.

What’s the Roth Catch-Up Mandate and Who Is Affected?

Starting in 2026, employees earning $150,000+ from their current employer in 2025 must make catch-up contributions ($8,000) to Roth 401(k)s rather than traditional pre-tax accounts. This means no immediate tax deduction, but contributions grow tax-free and withdraw tax-free in retirement. Verify your 2025 gross income on your final paystub to confirm if this applies to you.

How Long Will It Take to Receive My 2026 Tax Refund?

The IRS expects to issue nine out of ten refunds within 21 days of receipt. However, if you claim the Earned Income Tax Credit or Additional Child Tax Credit, your refund is held until at least mid-February by law. Most EITC/ACTC filers receive refunds around March 3, 2026. Consider direct deposit for fastest processing.

What Documents Do I Need for My 2026 Tax Return?

Gather: W-2s from all employers, 1099-NEC/1099-MISC for self-employment or contract income, 1099-INT for interest income, 1099-DIV for dividend income, 1099-B for investment transactions, mortgage interest statements (1098), charitable contribution documentation, property tax bills, and medical/education expense receipts. Organize chronologically by income type for tax preparer efficiency.

Should I Claim the Standard Deduction or Itemize in 2026?

Compare the standard deduction ($15,750 single, $31,500 MFJ for 2026) to your itemized deductions (mortgage interest, property taxes up to $40,000 SALT cap, charitable donations, medical expenses over 7.5% AGI). Most Denver taxpayers benefit from the standard deduction unless you own high-value real estate or have substantial charitable giving.

Can I Deduct My Home Office If I Work Remotely?

Yes, if you maintain a dedicated home office space used regularly and exclusively for business. Calculate the percentage of your home’s square footage dedicated to office use, then deduct that percentage of mortgage interest, utilities, insurance, and maintenance. The IRS allows either actual expense method or simplified method ($5/square foot, maximum 300 sq ft = $1,500 annual deduction).

This information is current as of 1/12/2026. Tax laws change frequently. Verify updates with the IRS or a tax professional if reading this later.

Last updated: January, 2026