Updated September 2026
2026 Year-End Tax Planning
New federal tax rules apply for the first time this year, including changes from the One Big Beautiful Bill Act. Not every item applies to every client; ask your advisor what is relevant to you.
Key Dates Before December 31
Dec 15
Start gifts of appreciated securities. Custodians can need up to two weeks to process transfers.
Dec 31
Last day to take required IRA distributions, make gifts under the $19,000 annual exclusion, and defer salary into a workplace plan.
Apr 15, 2027
IRA, Roth IRA, and HSA contributions can still be made for 2026. Business owners can fund employer contributions up to their filing deadline.
New in 2026
Charitable deduction rules changed
Only giving above 0.5% of adjusted gross income (AGI) is deductible, and top-bracket (37%) filers see the benefit capped at 35%. Non-itemizers can now deduct up to $1,000 (single) or $2,000 (joint) in cash gifts to qualified charities.
Trump accounts for children
Launched July 4, 2026. Eligible children must be under 18 and have a Social Security number. Up to $5,000 per year can be saved, growing tax-deferred; contributions are not tax-deductible. U.S. citizens born 2025 to 2028 may receive a $1,000 government deposit if an election is made. At 18, the account converts to a traditional IRA.
Current rates, new deductions
Under current law, the standard deduction is $32,200 (joint) and $16,100 (single). Temporary deductions through 2028 cover age 65+ ($6,000 per person), tips, overtime, and new car loan interest (up to $10,000), subject to income phaseouts.
Ideas to Discuss With Your Advisor
Retirement and tax-deferred growth
- Consider maximizing contributions. 401(k)/403(b): $24,500 ($32,500 age 50+; $35,750 ages 60 to 63). IRA or Roth IRA: $7,500 ($8,600 age 50+). Workplace plan catch-ups may have to be Roth if your 2025 wages were over $150,000.
- Consider a Roth conversion. Converting while rates are known may reduce future taxes, especially between retirement and required distributions.
- Inherited an IRA? Most non-spouse beneficiaries must empty the account within 10 years. Spreading withdrawals may help manage the tax impact.
Giving and estate planning
- Bunch several years of charitable gifts into one, for example through a donor advised fund, to clear the 0.5% floor.
- Give appreciated securities to qualified charities instead of cash; this may avoid capital gains tax and allow a deduction for full market value.
- Give from your IRA after 70½. Qualified charitable distributions of up to $111,000 count toward your RMD and are generally excluded from income. Gifts to donor advised funds do not qualify.
- Gift up to $19,000 per person ($38,000 for spouses combined) and review beneficiaries and your estate plan; under current law, the exemption is $15,000,000 per person.
Business owners: options include a SEP IRA (up to 25% of compensation, $72,000 cap), SIMPLE IRA ($17,000 deferral), Solo 401(k) (up to $72,000 total), and a defined benefit or cash balance plan for owners who want to save well beyond those limits. Defined benefit plans require an actuary, so start well before year-end.
Questions? We can help.
Every client’s situation is different. Contact your SFMG advisor to talk through which of these items apply to you and to schedule a year-end planning review.
Sources: IRS Rev. Proc. 2025-32; IRS Notice 2025-67; IRS Rev. Proc. 2025-19; P.L. 119-21. The purpose of this update is to share some of our current views and research. Although we make every effort to be accurate in our content, the data is derived from other sources and should be reviewed carefully. While we believe these sources to be reliable, we cannot guarantee their validity. Figures reflect law and published guidance in effect as of September 2026 and are subject to change. SFMG is not a CPA firm and does not provide tax advice. Please contact your tax advisor for discussion regarding specific tax planning strategies.
Sources
Where the figures above can be found. Figures reflect law and published guidance in effect as of September 2026.
| Topic | Where to find it |
|---|---|
| Standard deduction, annual gift exclusion, estate exemption | IRS Rev. Proc. 2025-32 |
| 401(k), 403(b), IRA and SIMPLE IRA limits; Roth catch-up wage threshold; SEP / Solo 401(k) $72,000; QCD $111,000 | IRS Notice 2025-67 |
| Trump accounts: eligibility, $5,000 limit, $1,000 deposit and election, deductibility | IRS Notice 2025-68IRS news release IR-2025-117IRS: $1,000 pilot deposit (Form 4547 election) |
| Age 65+ deduction, tips, overtime, car loan interest | IRS: Working Families Tax Cuts |
| Charitable deduction changes: 0.5% of AGI floor, 35% cap, $1,000 / $2,000 non-itemizer deduction | P.L. 119-21 (H.R. 1), full text |