Financial Planning
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One of the first planning decisions for 2026 is whether you are likely to claim the standard deduction or itemize. For 2026, the IRS says the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly. For some taxpayers, that will still be the simplest and most valuable option.
That said, itemizing may now be more beneficial for certain households than it was in recent years. The federal deduction for state and local taxes is higher for 2026, with the SALT cap listed at $40,400. If you also have meaningful mortgage interest, charitable contributions, or medical expenses, it may be worthwhile to compare both methods rather than assume the standard deduction is automatically best.
A refund often feels positive, but in many cases it can also mean too much tax was withheld during the year. On the other hand, underpaying can create avoidable penalties. The IRS continues to recommend that taxpayers review withholding during the year, especially after income changes, retirement transitions, or significant tax-law updates, and its Tax Withholding Estimator remains one of the best tools for doing that.
In general, taxpayers can avoid an underpayment penalty by meeting one of the IRS safe-harbor standards, including paying at least 90% of the current year’s tax or 100% of the prior year’s tax, with 110% applying in certain higher-income situations.
For charitable households, 2026 introduces a few important shifts. According to the IRS, beginning with tax year 2026, taxpayers who do not itemize may still deduct up to $1,000 of qualifying cash contributions if single, or $2,000 if married filing jointly. That could make charitable giving more tax-efficient for households that typically use the standard deduction.
At the same time, charitable planning has become more nuanced for itemizers. The IRS notes that itemized charitable deductions may be limited, and additional planning may be warranted for higher-income households. Independent tax commentary published after the law change also notes that top-bracket taxpayers may see a reduced benefit and that itemizers now face a floor before some charitable deductions begin to produce tax value.
For retirees, one planning strategy remains especially valuable: the qualified charitable distribution, or QCD. The IRS continues to allow eligible IRA owners age 70½ or older to make direct charitable transfers from an IRA, which can reduce taxable income without requiring the taxpayer to itemize deductions.
A newer planning topic for families is the rollout of Trump Accounts. Treasury and the IRS issued proposed regulations in March 2026 describing how initial accounts may be opened and how the pilot program contribution works. Those proposed rules confirm that there is a government contribution framework tied to eligible children, but they also make clear that implementation details are still developing.
Because this area is still being shaped by federal guidance, families may want to monitor developments carefully before making assumptions about account setup, administration, or long-term use. The concept is real, but it is still a moving target from a planning and operational standpoint.
529 plans are becoming more flexible
529 education savings plans also deserve renewed attention. The IRS says that beginning in 2026, the federal annual limit for tax-free K-12 withdrawals increases to $20,000, up from the prior $10,000 level.
Recent federal changes have also broadened the types of qualified education expenses in some situations. Even so, families should be cautious: state tax treatment does not always match federal rules. A withdrawal that is federally qualified may still receive different treatment under a state’s tax code, so it is wise to review your specific plan and state rules before taking distributions.
The key takeaway is simple: once tax season ends, tax planning begins. For 2026, that means reviewing whether itemizing may now make more sense, checking withholding before surprises build up, being more intentional about charitable giving, evaluating new child-focused savings options carefully, and revisiting how 529 plans fit into broader family planning.
As always, tax rules are complex and highly dependent on personal circumstances. A strategy that works well for one household may be less effective for another. For that reason, major tax decisions should be reviewed in coordination with your tax professional and financial advisor.
©2026 Elevatus Wealth Management. All rights reserved. Investment advisory services offered through Elevatus Wealth Management, a Registered Investment Advisor with the U.S. Securities and Exchange Commission. This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor. The information contained may have been compiled from third-party sources and is believed to be reliable.
Now That Tax Season Is Behind Us, Here’s What to Watch for in 2026
A planning update for the year ahead
With most 2025 tax returns now filed, this is a good time to shift focus from filing to planning. Several federal tax changes are now affecting 2026, and they may influence decisions around deductions, withholding, charitable giving, education planning, and new savings opportunities for children. While tax filing happens once a year, effective tax planning is best done throughout the year.Standard Deduction or Itemizing: It may be worth revisiting
One of the first planning decisions for 2026 is whether you are likely to claim the standard deduction or itemize. For 2026, the IRS says the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly. For some taxpayers, that will still be the simplest and most valuable option.
That said, itemizing may now be more beneficial for certain households than it was in recent years. The federal deduction for state and local taxes is higher for 2026, with the SALT cap listed at $40,400. If you also have meaningful mortgage interest, charitable contributions, or medical expenses, it may be worthwhile to compare both methods rather than assume the standard deduction is automatically best.
A large refund may be a reason to adjust withholding
A refund often feels positive, but in many cases it can also mean too much tax was withheld during the year. On the other hand, underpaying can create avoidable penalties. The IRS continues to recommend that taxpayers review withholding during the year, especially after income changes, retirement transitions, or significant tax-law updates, and its Tax Withholding Estimator remains one of the best tools for doing that.
In general, taxpayers can avoid an underpayment penalty by meeting one of the IRS safe-harbor standards, including paying at least 90% of the current year’s tax or 100% of the prior year’s tax, with 110% applying in certain higher-income situations.
Charitable giving rules are changing in meaningful ways
For charitable households, 2026 introduces a few important shifts. According to the IRS, beginning with tax year 2026, taxpayers who do not itemize may still deduct up to $1,000 of qualifying cash contributions if single, or $2,000 if married filing jointly. That could make charitable giving more tax-efficient for households that typically use the standard deduction.
At the same time, charitable planning has become more nuanced for itemizers. The IRS notes that itemized charitable deductions may be limited, and additional planning may be warranted for higher-income households. Independent tax commentary published after the law change also notes that top-bracket taxpayers may see a reduced benefit and that itemizers now face a floor before some charitable deductions begin to produce tax value.
For retirees, one planning strategy remains especially valuable: the qualified charitable distribution, or QCD. The IRS continues to allow eligible IRA owners age 70½ or older to make direct charitable transfers from an IRA, which can reduce taxable income without requiring the taxpayer to itemize deductions.
“Trump Accounts” are new, but families should expect more guidance to follow
A newer planning topic for families is the rollout of Trump Accounts. Treasury and the IRS issued proposed regulations in March 2026 describing how initial accounts may be opened and how the pilot program contribution works. Those proposed rules confirm that there is a government contribution framework tied to eligible children, but they also make clear that implementation details are still developing.
Because this area is still being shaped by federal guidance, families may want to monitor developments carefully before making assumptions about account setup, administration, or long-term use. The concept is real, but it is still a moving target from a planning and operational standpoint.
529 plans are becoming more flexible
529 education savings plans also deserve renewed attention. The IRS says that beginning in 2026, the federal annual limit for tax-free K-12 withdrawals increases to $20,000, up from the prior $10,000 level.Recent federal changes have also broadened the types of qualified education expenses in some situations. Even so, families should be cautious: state tax treatment does not always match federal rules. A withdrawal that is federally qualified may still receive different treatment under a state’s tax code, so it is wise to review your specific plan and state rules before taking distributions.
The bigger picture
The key takeaway is simple: once tax season ends, tax planning begins. For 2026, that means reviewing whether itemizing may now make more sense, checking withholding before surprises build up, being more intentional about charitable giving, evaluating new child-focused savings options carefully, and revisiting how 529 plans fit into broader family planning.
As always, tax rules are complex and highly dependent on personal circumstances. A strategy that works well for one household may be less effective for another. For that reason, major tax decisions should be reviewed in coordination with your tax professional and financial advisor.
Sources
- IRS, Tax Year 2026 Inflation Adjustments
- IRS, Underpayment of Estimated Tax by Individuals Penalty
- IRS, Topic No. 506, Charitable Contributions
- IRS, Treasury and IRS Issue Proposed Regulations on How to Open Initial Trump Accounts
- Federal Register, Trump Accounts Proposed Regulations
- IRS, 529 Plans: Questions and Answers
- IRS, Seniors Can Reduce Their Tax Burden by Donating to Charity Through Their IRA
- Fidelity, What New Tax Rules Mean for Donors
©2026 Elevatus Wealth Management. All rights reserved. Investment advisory services offered through Elevatus Wealth Management, a Registered Investment Advisor with the U.S. Securities and Exchange Commission. This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor. The information contained may have been compiled from third-party sources and is believed to be reliable.
