2026 Beginning-Year Tax Planning Ideas
- Does it make sense to change your IRA/401(k) contribution strategy from traditional pre-tax to after-tax Roth or visa versa?
- Are you maximizing your salary deferral contributions to your employer-sponsored retirement plan?
- If you are age 50+, are you making catchup contributions to your IRAs, Roth IRAs, and/or employer retirement plans? [NOTE: 2026 catchup contributions for taxpayers with taxable income above $145,000 MUST be made on an after-tax basis to Roth accounts.]
- If you are age 60-63, are you aware of the new qualified plan “Super” Catch-up contribution limits?
- Are you eligible to make a prior year traditional IRA or Roth IRA contributions before the April 15th deadline?
- Are you a candidate for a prior-year (or current year) “backdoor” Roth Conversion? This strategy may be appealing for certain taxpayers whose income is too high to qualify for a Roth IRA contribution) that involves making a non-deductible IRA contribution that is documented on IRS Form 8606) paired with an immediate Roth Conversion?
- Did you earn significant dividend income from treasury-only money market funds and/or interest from bonds issued by Federal Home Loan Bank and/or Federal Farm Credit Bank in a taxable investment account in 2025? (NOTE: this income is exempt from state income tax, but is reported as taxable on your 1099-DIV/INT. Make sure your CPA or tax preparer knows to report this income as exempt on your state tax return.)
- Will your itemized deductions exceed the standard deduction for 2025? The dramatic increase in the state and local tax deduction limit from $10,000 to $40,000 will make itemizing attractive again for millions of taxpayers. This change may also makes mortgage interest and charitable contributions valuable as deductions again too.
- If you have long term care insurance, are you aware that some or all of premium payments may qualify as medical expenses and, as such, may help you qualify for the medical expense deduction?
- If you have 529 Plans in place for children or grandchildren, are you aware that the OBBBA increased the annual allowable distribution amount per plan for K-12 private school tuition has been increased from $10,000 to $20,000 per year? The OBBBA also expanded the definition of qualifying expenses to include training and licensing expenses and for job training and apprenticeship program costs.
- If you are age 65+, are you eligible for the $6,000 per person in addition to the Standard Deduction (subject to income limits)?
- If you financed the purchase of a car in 2025, are you eligible for the new interest deduction ($10,000 limit)? This temporary deduction is allowed for the 2025-2028 tax years. Income phaseout starts at $100,000 for single filer and $200,000 for joint.
- If you received overtime pay in 2025 are you eligible for the new temporary deduction of up to $12,500 for single filers or $25,000 for joint filers. This deduction is available from $2025-2028. Income eligibility phaseout begins at $150,000 for single filers and $200,000 for joint filers.
- If you have student loans, are you eligible to deduct up to $2,500 of loan interest? Eligibility phases out at $175,000 for joint filers and $85,000 for all other filers.
2025 and 2026 IRA and Qualified Plan Contribution Limits
RELATED READING
2026 Tax and Retirement Reference Guide (Charles Schwab)
Don’t Overlook These Ten 2025 Year-End Tax Planning Strategies (FPH Blog)
John H. Robinson is the founder of Financial Planning Hawaii and Fee-Only Planning Hawaii and a co-founder of retirement simulation software-maker, Nest Egg Guru.
Although representatives of Financial Planning Hawaii may review client tax and legal documents, deliver tax-reporting documents, and raise awareness of potential tax and/or estate planning related mistakes or opportunities, none of this information should be construed as constituting specific tax or legal advice. All clients are encouraged to consult with their respective CPAs and/or attorneys for such guidance.
