Top 10 Tax Planning Tips for 2026

By Madison Bennett

Tax planning often gets put on the back burner, even though it can have a meaningful impact on your finances. For many pre-retirees and retirees, the challenge is simply the complexity of tax rules, deadlines, and changing contribution limits. 

Taking a thoughtful, proactive approach to tax planning can help reduce unnecessary taxes, shield your savings, and give you more flexibility in how you use your money. 

Here are 10 practical strategies that can help you navigate 2026 tax rules more clearly.

1. Maximize Retirement Account Contributions

An effective way to reduce taxable income is to fully leverage retirement accounts. In 2026, contribution limits are higher for several plans:

• 401(k), 403(b), and 457 plans: You can contribute up to $24,500, with catch-up contributions of $8,000 for those 50 or older. For participants aged 60–63, “super catch-up” contributions remain at $11,250. Keep in mind, all catch-up contributions must now go into Roth 401(k) accounts after-tax.
• Traditional and Roth IRAs: Individuals over 50 can contribute $7,500, with a $1,100 catch-up allowance. Roth IRAs offer tax-free growth and withdrawals, though income limits may restrict eligibility.

Maximizing contributions now not only reduces your current tax liability (for traditional accounts) but also compounds your savings over time. Even partial contributions can make a measurable difference over a decade or more.

2. Explore Roth Conversions

Roth conversions can provide long-term tax flexibility by moving funds from pre-tax retirement accounts into a Roth IRA. While you pay income taxes up front, the benefit is that future growth and withdrawals are tax-free.

There are several approaches to consider:

• Backdoor Roth IRA: Make an after-tax contribution to a traditional IRA, then convert immediately to a Roth.
• Mega backdoor Roth: Convert after-tax contributions from a 401(k) into a Roth account.

These strategies are particularly useful if you anticipate being in a higher tax bracket later, or if you want to reduce required minimum distributions (RMDs) in retirement.

3. Contribute to a Health Savings Account

If you have a high-deductible health plan, a health savings account (HSA) can be a powerful tax tool. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. Unused funds roll over each year and, at age 65, HSA money can be used for non-medical expenses without penalty.

For 2026, contribution limits rise to $4,400 for individuals and $8,750 for families, with an additional $1,000 catch-up contribution for those 55 or older. If you can leave the funds invested, an HSA can function as a supplemental retirement account with tax advantages.

4. Utilize Donor-Advised Funds

Charitable giving can be strategically coordinated to maximize tax benefits. A donor-advised fund (DAF) lets you make a lump-sum contribution, claim an immediate deduction, and distribute the funds over multiple years. Donating appreciated stock through a DAF also avoids capital gains taxes, allowing more of your donation to support causes you care about.

5. Make Qualified Charitable Distributions

If you’re over 70½ and own an IRA, a qualified charitable distribution (QCD) allows you to give directly to charity from your retirement account. The donation counts toward your RMD but is not included in taxable income. In 2026, individuals can contribute up to $111,000 through QCDs, or $222,000 for a married couple, making this an impactful tax strategy for charitable-minded retirees.

6. Implement Tax-Loss Harvesting

Selling investments at a loss (called tax-loss harvesting) can lower your taxable income. If your capital losses exceed gains, up to $3,000 can be applied against ordinary income annually, with remaining losses carried forward. This approach preserves your portfolio’s asset allocation while mitigating taxes on profitable positions.

7. Understand Long-Term vs. Short-Term Gains

Long-term capital gains (assets held over one year) are taxed at lower rates than short-term gains, which are taxed as ordinary income. For example, in 2026, married couples in the 0% long-term capital gains bracket can have taxable income up to $98,900. Planning the timing of asset sales based on your tax bracket can help reduce the taxes you owe.

8. Take Advantage of the Qualified Business Income Deduction

Business owners may be eligible for a deduction of up to 20% of qualified business income. To maximize this benefit, consider timing income or retirement contributions to stay below the phase-out threshold. Coordinating your retirement contributions, taxable income, and business deductions can yield significant tax savings.

9. Consider Estate and Gift Tax Planning

The 2026 lifetime gift and estate exemption is $15 million per individual and $30 million per married couple, with an annual gift exclusion of $19,000 per recipient. Thoughtful gifting strategies, such as spreading gifts across multiple family members or using trusts, can help reduce future estate taxes and shift wealth efficiently.

10. Coordinate Your Advisory Team

Taxes don’t exist in isolation. Financial Consulate has experienced CPAs on staff, and the advisors work hand in hand with them on tax matters. Working together, they can uncover opportunities that might otherwise be missed, keep your overall plan coherent, and reduce the risk of unexpected tax surprises. 

Confidently Navigate 2026 Tax Planning

Tax planning doesn’t need to feel overwhelming or reactive. With careful preparation and the right coordination, you can manage your tax liability proactively and safeguard your wealth. 

As a fee-only fiduciary firm, Financial Consulate helps clients understand these strategies in plain terms, so they can make decisions that align with their goals and timelines.

If you’re ready to think through your 2026 tax strategies in a structured, practical way, consider scheduling a consultation with us. Together, we can review your retirement contributions, investment positioning, charitable plans, and estate strategies.

You can reach me or our team at (410) 823-7283, or you can schedule a time to talk at your convenience through our website.

Frequently Asked Questions

What tax planning moves should retirees and pre-retirees focus on early in 2026?

Early tax planning in 2026 often starts with reviewing retirement account contributions, potential Roth conversion opportunities, and health savings account funding. Timing matters, especially for managing required minimum distributions, capital gains, and charitable strategies like qualified charitable distributions. Addressing these items early gives you more flexibility and reduces the risk of last-minute decisions that may increase taxes.

How do Roth conversions fit into a long-term tax planning strategy?

Roth conversions can help manage future tax exposure by shifting assets from tax-deferred accounts into tax-free Roth accounts. While conversions create taxable income in the year they occur, they may reduce future required minimum distributions and provide more control over retirement cash flow. Whether a Roth conversion makes sense depends on your current tax bracket, future income expectations, and overall retirement plan.

Why is coordinating tax planning with investments and estate planning important?

Tax decisions affect more than just your annual return; they influence investment performance, retirement income, and how assets transfer to heirs. Coordinating tax planning with investment and estate strategies helps prevent decisions in one area from creating unintended consequences in another. Financial Consulate’s integrated, fee-only fiduciary approach helps clients align taxes, investments, and long-term goals into a cohesive plan rather than treating each decision in isolation.

About Madison

Madison Bennet, CFP®, CFT-I™, is a Wealth Advisor at The Financial Consulate, where she works directly with clients to help them stay aligned with their long-term financial goals. Her planning work includes tax planning, estate planning, investment planning, and retirement planning. She also mentors Financial Consulate’s interns, supporting the firm’s education-driven culture. Her favorite conversations with clients focus on what they want their money to do for them, then building a clear path from today’s choices to the future they’re working toward.

Madison earned her bachelor’s degree in business administration with a concentration in finance from Towson University. She became a CERTIFIED FINANCIAL PLANNER® professional in 2020 and earned the Certified Financial Therapist I™ designation in 2022, reflecting her interest in both the technical and personal sides of financial decision-making. Outside of work, Madison enjoys cooking, a passion she picked up from her parents. Italian dishes are her favorite, and cooking is one of her favorite ways to spend time with family. To learn more about Madison, connect with her on LinkedIn.