2026 Year-End Tax Planning: What's Different This Year?

Every fall we pull out the same year-end tax checklist. This year, a good chunk of it needs rewriting.

The One Big Beautiful Bill Act, which the IRS now calls the Working Families Tax Cuts, made a lot of changes. We walked through the whole law in two earlier posts, The One Big Beautiful Bill and You and 2026 Tax Law Changes. This post is different. It's the short list of what actually changes your December moves, because 2026 is the first tax year a bunch of these rules apply.

What's new for the 2026 tax year

Here's the quick version:

Charitable gifts now have a floor if you itemize. The first 0.5% of your adjusted gross income in gifts doesn't count.
If you're in the top 37% bracket, itemized deductions are worth at most 35 cents on the dollar.
If you don't itemize, you can now deduct up to $1,000 of cash gifts ($2,000 married filing jointly).
If you're 65 or older, the new $6,000 senior deduction shrinks as your income rises.
If you earn a high salary and you're 50 or older, your 401(k) catch-up contributions may now have to go in as Roth.
Trump accounts for kids opened this summer, and 2026 contributions have a hard December 31 deadline.

Let's take them one at a time.

Charitable giving got a little more complicated

Let's say your AGI is $200,000 and you itemize. The first $1,000 you give this year (0.5% of $200,000) isn't deductible. Give $5,000 and only $4,000 counts.

We think this makes bunching more attractive than ever. The floor hits every year you itemize, so giving three years' worth of gifts in one year means you only take that haircut once. A donor-advised fund lets you take the deduction now and send grants to charities over time.

If you don't itemize, the new $1,000 or $2,000 deduction is a nice little bonus. Two catches: it's for cash gifts only, and gifts to a donor-advised fund don't qualify.

If you're 70½ or older, look hard at a qualified charitable distribution. That's money sent straight from your IRA to a charity. It never shows up in your income, so the 0.5% floor doesn't touch it, and it can count toward your required minimum distribution. The 2026 limit is $111,000 per person.

Retirees: the senior deduction has a sneaky phase-out

The new senior deduction is $6,000 per person 65 or older, or $12,000 for a married couple when both of you qualify. It runs from 2025 through 2028. It shrinks by 6% of your modified AGI above $75,000 single or $150,000 joint.

Here's why that matters in December. Let's say you're a married couple, both over 65, with modified AGI of $150,000. You do a $20,000 Roth conversion. Your income is now $170,000, so each of your $6,000 deductions drops by $1,200. That's $2,400 of deductions gone, on top of the tax on the conversion itself.

That doesn't mean skip the conversion. It means size it on purpose.

Medicare is the other one to watch. Your 2026 income sets your 2028 Part B and Part D premiums through what's called IRMAA. For reference, the 2026 surcharges start above $109,000 of income for single filers and $218,000 for joint filers. Going $1 over a line can cost you the whole surcharge for that tier.

Still working? Check your catch-up contributions

Starting in 2026, if your FICA wages from your employer were over $150,000 last year, any catch-up contributions to your 401(k), 403(b), or governmental 457 have to be Roth. You lose the upfront deduction on that piece. If your plan doesn't offer a Roth option, you can't make catch-ups at all.

The 2026 numbers: $24,500 regular limit, $8,000 catch-up at 50 and over, and $11,250 if you're 60 to 63 and your plan allows it.

Business owners, take note. The Roth catch-up rule is based on W-2 wages, so it doesn't apply to partners or self-employed owners. If you run an S corp and pay yourself a salary, it could. Check your payroll before year end.

Have kids or grandkids? Trump accounts have a real deadline

Trump accounts opened on July 4, 2026. Up to $5,000 a year can go in from family and other sources, and up to $2,500 of that can come from an employer tax-free. Kids who are U.S. citizens born from 2025 through 2028 can also get a $1,000 government deposit.

Two things people miss. Your contributions aren't deductible. And unlike an IRA, there's no "count it for last year by April" rule. If you want money in for 2026, it has to go in by December 31.

We'd still compare it to a 529 before you pick. They do different jobs.

The usual suspects, briefly

We're covering these in more depth on our social channels in October, so here's the short version.

Roth conversions. They still make sense in lower income years. Just run the numbers against the senior deduction and IRMAA lines above.
Bunching. Covered above. The new floor makes it more useful, not less.
Tax-loss harvesting. Losses offset gains, plus up to $3,000 a year of ordinary income, and the rest carries forward. Watch the wash sale rule if you buy back the same thing within 30 days.

A simple year-end calendar

Now through November: estimate your 2026 income. Almost every item above depends on it.
By December 31: charitable gifts and donor-advised fund contributions, qualified charitable distributions, Roth conversions, loss harvesting, 401(k) contributions through payroll, Trump account contributions, and required minimum distributions if you're taking them.
January 15, 2027: the fourth quarter estimated tax payment for 2026 is due.

Why this needs your actual numbers

None of this works off a rule of thumb. A Roth conversion that's smart for your neighbor can trip your senior deduction or a Medicare surcharge. We're of the opinion that year-end moves should come from a projection, not a hunch.

That's what our team does. We bring advanced planning and tax expertise to the same table, so your advisor and your tax picture aren't working in silos. If you want a second set of eyes before December, feel free to reach out.

FAQ

What's the deadline for 2026 year-end tax moves?

Most of them are due December 31, 2026. That includes charitable gifts, Roth conversions, qualified charitable distributions, tax-loss harvesting, and Trump account contributions. IRA contributions for 2026 can still be made up to the tax filing deadline in April 2027.

Can I deduct charitable donations in 2026 if I don't itemize?

Yes. Starting in 2026, non-itemizers can deduct up to $1,000 of cash gifts to qualifying charities, or $2,000 on a joint return. Gifts to donor-advised funds and gifts of property don't qualify.

How does the new 0.5% charitable floor work?

If you itemize, only your charitable gifts above 0.5% of your adjusted gross income are deductible. With a $300,000 AGI, the first $1,500 of gifts doesn't count. Bunching gifts into one year means you take that haircut less often.

Will a Roth conversion reduce my senior deduction?

It can. A conversion raises your modified AGI, and the $6,000 senior deduction drops by 6% of income above $75,000 single or $150,000 joint. It's gone entirely at $175,000 single or $250,000 joint.

Do my 401(k) catch-up contributions have to be Roth in 2026?

Only if your FICA wages from that employer were over $150,000 in 2025. If so, catch-ups must go in as Roth, and if your plan has no Roth option you can't make catch-ups. Self-employed owners and partners aren't affected.

Important Information

Generous Wealth Management LLC is a state-registered investment adviser in Massachusetts. Registration does not imply a certain level of skill or training. This article is general educational information, not personalized investment, tax, or legal advice. Tax figures, limits, and rules shown here reflect the law and IRS guidance as of September 27, 2026. They may change because of new legislation, annual inflation adjustments, or new IRS guidance. Please consult a qualified tax professional about your situation before acting. Our Form ADV and firm information (CRD 318091) are available at https://adviserinfo.sec.gov/firm/summary/318091.