The December 31 Deadlines: RMDs, Roth Conversions, and the Ones People Think Are April 15

There are two year-end calendars, and most people have them backwards.

On one are the decisions that close on December 31 and cannot be reopened: a required distribution you did not take, a Roth conversion you meant to do, a 401(k) contribution you planned to top up, a stock you meant to sell at a loss. The calendar year ends, the tax year ends with it, and the decision is made whether you made it or not.

On the other are the decisions that can still be made for this year in April: an IRA contribution, an HSA contribution, a SEP-IRA for the self-employed. People rush these in December as though the deadline were upon them, while the ones that genuinely close in three weeks sit untouched.

The cost of getting the lists backwards is specific. A $1 million IRA balance at 73 requires a $37,736 distribution this year. Miss December 31 and the penalty is $9,434 — before the income tax you still owe on the money once you take it.

A note before you start. This is general education, not tax advice. Required-distribution figures come from this site's RMD engine, which implements the IRS Uniform Lifetime Table and the SECURE 2.0 starting ages; federal bracket and standard-deduction figures are tax year 2026 from IRS Revenue Procedure 2025-32; contribution limits are the 2026 figures in this site's contribution engine. Deadlines described as December 31 assume a calendar-year taxpayer, which is nearly everyone. Several of these rules carry exceptions for specific situations — a first-year distribution, a plan that allows catch-up at different ages, a state with its own 529 deadline — and the exceptions are flagged where they matter.

1. The two calendars

Everything that follows sorts into one of these columns.

The right-hand columns are the relief. Read the left column first, because it is the one with a clock on it.

2. Required minimum distributions

Every required distribution after the first is due by December 31 of the year it applies to. Not the following April. Not when the 1099-R arrives. December 31.

The amount is arithmetic — the prior year's ending balance divided by a life-expectancy factor from the IRS Uniform Lifetime Table — and this site's RMD engine computes it. On a $1 million balance:

Your starting age depends on your birth year: 73 if you were born 1951 through 1959, 75 if you were born in 1960 or later.

What missing it costs

The penalty is 25% of the shortfall. On the $37,736 above, missing it entirely is $9,434. Correct it within the statutory window — generally by taking the distribution and filing Form 5329 within two years, before the IRS assesses the penalty — and the rate drops to 10%, or $3,774.

The penalty is in addition to the income tax, not instead of it. You still owe ordinary income tax on the distribution once you take it. The penalty is the price of lateness.

The first-year exception, and why it is a trap

Your first required distribution may be deferred until April 1 of the following year. Someone who turns 73 in 2026 can take their 2026 distribution as late as April 1, 2027.

This sounds like a favour. It usually is not. The 2027 distribution is still due December 31, 2027 — so deferring means two distributions land in 2027, stacked on top of each other and on top of Social Security and everything else, in a single tax year. In a graduated state, that can push the combined amount into a higher state bracket as well as a higher federal one.

Treat the April 1 deferral as a cash-flow tool, not a tax-saving one. The ordinary choice is to take the first distribution in its own year, which keeps every year's income to one distribution.

The aggregation trap

IRAs may be aggregated — compute the requirement for each, add them, and take the total from any one of them. 401(k)s may not. Each plan must distribute its own amount. Someone with two old employer plans and an IRA who takes one large withdrawal from the IRA has satisfied the IRA and missed both plans — a 25% penalty on each. This is the commonest expensive RMD mistake, and December is when it is still fixable.

The charitable alternative

If you give to charity anyway, a qualified charitable distribution — a direct transfer from your IRA to the charity — counts toward the required amount and never enters your income at all. It requires age 70½, a direct transfer rather than a reimbursement, an eligible recipient, and it is subject to an indexed annual cap (see IRS Publication 590-B for the current figure). It also must be completed by December 31. A QCD initiated in the last week of December that does not clear until January counts for January.

3. Roth conversions

A conversion must be completed — the money actually moved from the traditional account to the Roth — by December 31 to count for this year. Not elected. Not requested. Completed. Custodians slow down in the last two weeks of December, and a conversion submitted on December 29 that processes on January 2 is a 2027 conversion.

And it cannot be undone. Since 2018 there is no recharacterization of a conversion. The decision is permanent the moment it clears.

The bracket-filling math

The reason to convert in a given year is that you have room in a bracket you would rather pay now than later. The arithmetic, on 2026 single brackets:

A single filer with $60,000 of taxable income before any conversion sits in the 22% bracket, which runs to $105,700. That leaves $45,700 of room at 22%.

Going $20,000 past the bracket edge costs 24% on the excess rather than 22% — a $400 difference on that $20,000, which is modest. The larger jumps are at $201,775 (to 32%) and at the thresholds where Medicare premiums and the net investment income tax switch on. The useful exercise is not "convert everything" or "convert nothing" but "convert to the edge of the bracket I can tolerate."

Add your state. A conversion is ordinary income in most states that tax income, and the state bill lands on top of the federal one — this site's state retirement tax calculator shows what each state charges on a conversion of any size.

Two things conversions trigger later

Medicare premiums, two years out. The IRMAA surcharge on Medicare Part B and D premiums is set from income two years earlier. A large 2026 conversion raises 2028 premiums. For anyone within two years of Medicare, that is part of the conversion's cost.

The tax bill itself. Pay it from cash outside the IRA if you can. Having tax withheld from the conversion means less money reaches the Roth, and if you are under 59½, the withheld amount is a distribution subject to the 10% early withdrawal penalty.

4. 401(k), 403(b) and 457 deferrals

Elective deferrals are made through payroll, so the deadline is your last paycheck of the year — which for many employers means the last payroll processed in December, and the election has to be in place before that payroll runs. There is no April catch-up for a workplace plan.

The 2026 limits, from this site's contribution engine:

The Roth catch-up mandate. From 2026, anyone whose prior-year FICA wages from that employer exceeded $150,000 must make catch-up contributions as Roth. It applies to catch-up dollars only, not the base $24,500, and it is keyed to last year's wages at that employer rather than this year's.

The December check

Open your most recent pay stub and find year-to-date deferrals. Subtract from $24,500 (plus your catch-up, if any). The result is your headroom, and the number of paychecks left in the year is how many it has to be spread across. The contribution limit optimizer does this arithmetic and shows whether raising your percentage for the final paychecks fits.

One caution about front-loading. Some plans match per paycheck rather than annually. If you hit the limit in November, December's paychecks carry no deferral and therefore no match — unless the plan has a "true-up" provision that reconciles the match at year end. Check before you accelerate.

5. The April 15 items — the relief

These are the contributions people rush in December for no reason. Each can be made until April 15, 2027 and designated for tax year 2026.

Traditional and Roth IRA. 2026 limit $7,500, plus $1,100 at age 50 or over. The contribution must be designated as a 2026 contribution when made; custodians default to the current year, so in January through April the designation is a box you have to tick.

Health savings account. 2026 limits $4,400 self-only, $8,750 family, plus $1,000 at age 55 or over, per IRS Publication 969. Same April 15 deadline, same designation requirement. Note the difference from a payroll HSA contribution: money contributed through payroll avoids FICA as well as income tax, while a contribution you make directly in April gets the income-tax deduction but not the FICA saving. If your employer's payroll allows a December HSA election, that is worth 7.65% more than the same dollars in April.

SEP-IRA. Deadline is the filing deadline for the return including extensions — so October 15, 2027 if you extend. For the self-employed, this is the most flexible retirement contribution in the system.

Why it matters that these are April items: cash. A household choosing between a December 401(k) top-up and a December IRA contribution should do the 401(k) first, because the IRA can wait four months and the 401(k) cannot.

6. The other December 31 items

Tax-loss sales. A loss is recognized on the trade date, so a sale placed on December 31 counts — but the wash-sale rule disallows the loss if you buy substantially identical securities within 30 days before or after, which means a December sale and a January repurchase inside the window undoes itself. Losses offset gains, then up to $3,000 of ordinary income, and the rest carries forward.

Charitable gifts. A check counts when mailed (the postmark), a card charge when it posts, a securities transfer when it completes — and transfers of appreciated securities take time at year end. With the 2026 standard deduction at $16,100 single and $32,200 married filing jointly, many households no longer itemize in a typical year; bunching two or three years of giving into one year, often through a donor-advised fund, is the standard way to make the deduction count again, and the fund contribution itself must be completed by December 31.

The annual gift exclusion. $19,000 per recipient for 2026, and it does not carry over. A gift to each of three children on December 31 uses this year's exclusions; the same gifts on January 2 use next year's.

529 contributions. The federal rules do not care about timing, but most states that offer a deduction or credit require the contribution by December 31. A handful allow until the state filing deadline. Check your state's plan.

Flexible spending accounts. Health FSA money is use-it-or-lose-it by plan year, subject to whatever grace period or carryover your plan offers. Those are plan terms, not law — read your own.

Required distributions from inherited accounts. Beneficiaries subject to annual distributions under the ten-year rule have the same December 31 deadline.

7. The January 15 deadline — and the December cure

The fourth-quarter estimated tax payment is due January 15, 2027. It matters here because the two biggest items on the December list — a conversion and a distribution — both generate tax that nothing has withheld against.

Underpayment penalties apply when you have not paid in enough during the year, and the safe harbor is paying 100% of last year's tax (110% if last year's adjusted gross income was over $150,000) or 90% of this year's. A large conversion in November can leave you short.

Here is the asymmetry that makes December useful. An estimated payment counts on the date it is paid; a payment made January 15 covers the fourth quarter only. Withholding, by contrast, is treated as paid evenly across the year regardless of when it actually happened. Extra withholding from a December paycheck, or from a December IRA distribution, is credited as though a quarter of it had been paid in each quarter — which can cure an underpayment from earlier in the year that an estimated payment made the same day cannot.

The mechanics: ask your employer to withhold an additional flat amount from the final paychecks (a W-4 change), or — for retirees — take a distribution in December with a high withholding percentage. A $20,000 IRA distribution with 100% withholding is $20,000 of "evenly paid" tax. The distribution itself is income, so this is a tool for someone who needed to take money out anyway, not a free lunch. The IRS estimated-tax page describes the safe harbors.

8. A December checklist, in order of irreversibility

1. Required distributions — every IRA and every plan separately. Due December 31 unless it is your first, in which case decide now whether to stack it into April.
2. Qualified charitable distributions — initiated early enough to clear by December 31.
3. Roth conversion — sized to the bracket edge you chose, submitted with a week to spare, tax paid from outside the account.
4. 401(k) deferral election — headroom divided across the remaining paychecks, match true-up checked.
5. Tax-loss sales — placed by December 31, with the wash-sale window in mind on both sides.
6. Charitable gifts and donor-advised fund contributions — mailed, charged, or transferred in time to complete.
7. Annual exclusion gifts — $19,000 per recipient, this year's exclusion.
8. 529 contributions — by your state's deadline, which is probably December 31.
9. Underpayment check — and if short, extra December withholding rather than a January estimated payment.
10. Then, in January through April: IRA, HSA, and SEP contributions for 2026, each designated for 2026.

9. When this needs a professional

A first required distribution in a year with other large income. The April 1 deferral and the stacking question interact with brackets, Medicare premiums and state tax in ways that a rule of thumb will not settle.

A conversion large enough to cross the Medicare or net-investment-income thresholds. The cost is not only the bracket.

Multiple employer plans. The aggregation rules differ by account type, and the penalty for mixing them is 25% per plan.

A move between states during the year. Which state taxes a conversion or distribution taken in a transition year depends on residency rules that vary by state.

In each case the cost of an hour of advice is small next to a 25% penalty or a permanent conversion made at the wrong size.

Frequently asked questions

When is my required minimum distribution due? December 31 of the year it applies to, for every year except the first. A first distribution may be deferred to April 1 of the following year, but doing so puts two distributions into that year.

What is the penalty for missing an RMD? 25% of the shortfall, reduced to 10% if you correct it within the statutory window. On a $37,736 requirement, that is $9,434 or $3,774 — in addition to the income tax you still owe on the distribution.

Can I do a Roth conversion in January and have it count for last year? No. A conversion counts for the year in which it is completed, and there is no April grace period and no way to reverse it. That is the opposite of an IRA contribution, which can be made for the prior year until April 15.

How much should I convert? Up to the edge of the bracket you are willing to pay. A single filer with $60,000 of taxable income has $45,700 of room before the 24% bracket starts at $105,700; converting that amount costs $10,054 federal plus state tax. Also check the Medicare premium thresholds two years out.

Is there an April deadline for my 401(k)? No. Workplace plan deferrals go through payroll, so the deadline is the last payroll of the year. The 2026 limit is $24,500, plus $8,000 at age 50 or $11,250 at ages 60–63.

Which contributions can I still make for 2026 after the year ends? Traditional and Roth IRA ($7,500, plus $1,100 at 50), HSA ($4,400 self-only or $8,750 family, plus $1,000 at 55), and SEP-IRA contributions — the first two until April 15, 2027, the SEP until the filing deadline including extensions. Each must be designated for 2026.

Does a December charitable gift count if the charity cashes the check in January? Yes, if the check was mailed by December 31 — the postmark governs. A card charge counts when it posts, and a securities transfer when it completes, which is why appreciated-stock gifts should be started early in December.

Why would December withholding help if I under-paid earlier in the year? Because withholding is treated as paid evenly across the year regardless of when it happens, while an estimated payment counts only on its date. Extra withholding in December can cure a first- or second-quarter shortfall that a January estimated payment cannot.

Do inherited IRAs have the same deadline? Yes. A beneficiary who must take annual distributions under the ten-year rule has the same December 31 deadline, and the same penalty for missing it.

What to do next

Work the left column of the table first. Two numbers decide most of it: what your required distribution is, and how much room you have left in your current bracket.

• RMD calculator — your required amount, your starting age, and the penalty if you miss it.
• Roth vs. Traditional calculator — the two rates that decide whether converting now beats paying later.
• Contribution limit optimizer — your remaining 401(k) headroom and how to spread it across the paychecks left.
• Your RMD Is Not the Problem. What Your State Does With It Is. — what your state charges on the distribution once you take it.
• The 2026 Roth Catch-Up Mandate — who must make catch-up contributions as Roth this year.

Every figure on this site is sourced and dated. How we source every number.

Figures in this article are illustrations computed by this site's own engines: required distributions from its RMD engine, which implements the IRS Uniform Lifetime Table in Publication 590-B and the SECURE 2.0 starting ages; conversion tax from the 2026 single-filer brackets in IRS Revenue Procedure 2025-32; contribution limits from its 2026 contribution engine; HSA limits from IRS Publication 969. Deadlines assume a calendar-year taxpayer. State tax, Medicare premium thresholds and plan-specific terms vary and are not fully modelled. This is general education and not tax advice; for your own situation consult a licensed tax professional.