Planning for 2026 Taxes

Taxes influence nearly every part of your financial life. The real opportunity, however, lies not in annual tax filing but in the year‑round strategic planning that shapes those results. While tax preparation reports what has already happened, proactive tax strategy helps guide decisions around income, investments, and gifting to improve long‑term outcomes.

A Year‑Round Approach

Tax preparation offers limited flexibility once the year ends. By contrast, ongoing tax planning incorporates past, current, and future income, portfolio structure, and capital‑gain considerations. While it may not always result in a refund, it helps position you for better outcomes over time.

Income Timing

Certain income and deductions such as bonuses, self‑employment income, and some retirement distributions may be shifted between years to help manage tax brackets.

Tax‑Advantaged Investing

Taking advantage of accounts that are designed to manage income and grow tax-deferred can help with long-term liabilities. Notable recent changes include:

2026 401(k) contribution limits increased to $24,500, with an $8,000 catch‑up.

SECURE 2.0 changes require certain high earners over the age of 50 to make catch-ups in post-tax Roth IRAs rather than Traditional pre-tax IRAs. This removes the immediate tax break but allows for tax-free growth—a major shift in long-term strategy.

“Super” catch‑ups for ages 60–63 rise to $11,250 in 2026.
Most retirement accounts require distributions beginning at age 73; Roth IRAs remain exempt.

Charitable Giving

Charitable strategies can support the causes you care about while also contributing to tax efficiency. Several One Big Beautiful Bill Act (OBBBA) updates influence charitable planning:

Above‑the‑line deduction increased to $1,000 (single) / $2,000 (joint).
A new AGI floor requires donations above 0.5% of AGI to qualify for itemization.
Itemized‑deduction benefits for top‑bracket taxpayers were capped at 35%.
Qualified Charitable Distributions (QCDs): The limit has moved up to $111,000. If you are over 70½, this remains one of the most efficient ways to donate, as the money goes directly from your IRA to a charity without ever counting as taxable income.
Charitable "Bundling": With the standard deduction rising to $16,100 (single) and $32,200 (joint), many people won't reach the threshold to itemize every year. "Bundling" (donating two years' worth of gifts in one calendar year) can help you jump over that hurdle.

Roth Contributions and Conversions

An important tax strategy to review is whether it makes sense to do a Roth conversion. Roth conversions allow for tax‑free withdrawals later by paying taxes upfront, which can result in a larger-than-expected tax bill.6 Because the converted amount is taxable in the year of conversion, it is critical to evaluate timing, tax‑bracket impact, and long‑term benefits before proceeding.

Tax‑Loss Harvesting

Market volatility can create opportunities to realize losses and offset gains. Effective implementation requires careful coordination across positions and adherence to wash‑sale rules.

Estate and Gift Taxes

The OBBBA has set a very high bar ($15M individual / $30M couple) indexed for inflation.7 While this exempts 99% of estates from federal tax, the strategy shifts to liability protection, managing cost-basis and potential state-level inheritance taxes, which often have much lower triggers. Tax laws evolve, and even “permanent” rules can be changed by a future Congress so ongoing review remains important.

Avoiding Surprises

Throughout the year, consistent attention is necessary in several areas to help avoid surprises and unexpected tax liabilities:

Under‑withholding may trigger quarterly estimated tax issues.
Withdrawals from some retirement accounts are taxable as income, so your retirement income strategies should coordinate the withdrawal sequence to help manage overall liability.
If your income exceeds certain thresholds, you may incur additional liability, such as the Medicare related costs or surtaxes.

Bottom Line

Tax preparation records the past. Tax strategy shapes the future. With thoughtful, year‑round planning, in conjunction with your financial professional, you can shape what comes next and support long-term financial health. If you have any questions or would like to talk with us about your full-year tax strategy, please do not hesitate to reach out. We are here to help.