For many households, 2026 is the first year that effects of the One Big Beautiful Bill Act (OBBBA) may show up on your actual tax return. Some of the new rules reward early action, others quietly reduce the value of long-standing habits, and the usual year-end checklist still matters as much as ever. Here is what deserves attention before December 31:
Charitable Giving Works Differently Now
The biggest shift is on Schedule A, itemized deductions. Beginning with 2026 returns, itemizers can deduct charitable gifts only to the extent their total donations exceed 0.5% of AGI. With $500,000 of AGI, the first $2,500 of giving produces no deduction; at $1 million, the first $5,000 is lost. Taxpayers in the top bracket also face a cap that limits the value of itemized deductions to 35 cents on the dollar rather than 37, and this cap applies to all itemized deductions, not just charitable donations.
Bunching several years of gifts into one year, often through a donor-advised fund, clears the floor once instead of every year. Donating appreciated stock rather than cash remains one of the most efficient ways to give because you’re offloading high gain positions. For those 70½ or older, Qualified Charitable Distributions from an IRA ($111,000 per person) sidestep the floor entirely because the gift never enters income.
Households that take the standard deduction gain something new. They can now deduct up to $1,000 of cash charitable contributions, or $2,000 on a joint return. Gifts to donor-advised funds do not qualify; the gift must go directly to a charity.
Watch Income Around the SALT Phase-Down
For 2026, the SALT cap is $40,400, and the deduction begins to phase out once modified AGI exceeds $505,000. Above $606,333 of MAGI, the cap drops back to $10,000. Notably, the same cap and thresholds apply whether a taxpayer files single or jointly, which means a married couple gets no more room than an individual. Married couples filing separately face half those amounts. Within the phase-down band, every additional dollar of income costs more than its stated bracket suggests. Roth conversions, capital gains, and bonus timing should be modeled with this range in mind, and business owners should confirm whether a pass-through entity tax election still makes sense.
AMT Is Back in the Conversation
The AMT exemption now begins to phase out at $500,000 for individuals and $1 million for married couples, and it phases out twice as fast as it did under prior law. Executives holding incentive stock options should run the numbers before exercising, since the combination can push effective rates well above the headline bracket.
Retirement Contributions and the New Roth Catch-Up Rule
The 2026 employee deferral limit is $24,500, with an $8,000 catch-up for those 50 and older and a special $11,250 for ages 60 through 63. A significant change applies to higher earners. Anyone whose FICA wages from their employer exceeded $150,000 in 2025 must now make catch-up contributions as Roth. If a plan offers no Roth option, those catch-up contributions are unavailable altogether. Many large employer plans added Roth features ahead of 2026 to avoid exactly this outcome, so it’s mostly a concern with smaller employer plans. It is worth confirming with payroll that elections were updated correctly. HSA limits rose to $4,400 for individuals and $8,750 for families, plus a $1,000 catch-up at 55.
Required minimum distributions (RMD), from IRAs remain due by December 31 for those 73 and older, and a year with lower income may still be the right moment for a partial Roth conversion. If you inherited an IRA after 2020, and you are not the surviving spouse, you will likely need to take an RMD.
Smaller Items Worth a Look
The annual cap on tax-free 529 withdrawals for K-12 expenses rises to $20,000, and owners of specified service businesses benefit from a wider QBI phase-in range.
The common thread this year is that timing and income levels matter more than ever. A year-end review with your CPA and Wealth Manager is the best way to make sure each move works well within the context of your overall plan.
Weekly Commentary
2026 Year-End Tax Planning: Key Strategies for Charitable Giving, SALT, AMT, and Retirement Contributions
Mallon FitzPatrick
For many households, 2026 is the first year that effects of the One Big Beautiful Bill Act (OBBBA) may show up on your actual tax return. Some of the new rules reward early action, others quietly reduce the value of long-standing habits, and the usual year-end checklist still matters as much as ever. Here is what deserves attention before December 31:
Charitable Giving Works Differently Now
The biggest shift is on Schedule A, itemized deductions. Beginning with 2026 returns, itemizers can deduct charitable gifts only to the extent their total donations exceed 0.5% of AGI. With $500,000 of AGI, the first $2,500 of giving produces no deduction; at $1 million, the first $5,000 is lost. Taxpayers in the top bracket also face a cap that limits the value of itemized deductions to 35 cents on the dollar rather than 37, and this cap applies to all itemized deductions, not just charitable donations.
Bunching several years of gifts into one year, often through a donor-advised fund, clears the floor once instead of every year. Donating appreciated stock rather than cash remains one of the most efficient ways to give because you’re offloading high gain positions. For those 70½ or older, Qualified Charitable Distributions from an IRA ($111,000 per person) sidestep the floor entirely because the gift never enters income.
Households that take the standard deduction gain something new. They can now deduct up to $1,000 of cash charitable contributions, or $2,000 on a joint return. Gifts to donor-advised funds do not qualify; the gift must go directly to a charity.
Watch Income Around the SALT Phase-Down
For 2026, the SALT cap is $40,400, and the deduction begins to phase out once modified AGI exceeds $505,000. Above $606,333 of MAGI, the cap drops back to $10,000. Notably, the same cap and thresholds apply whether a taxpayer files single or jointly, which means a married couple gets no more room than an individual. Married couples filing separately face half those amounts. Within the phase-down band, every additional dollar of income costs more than its stated bracket suggests. Roth conversions, capital gains, and bonus timing should be modeled with this range in mind, and business owners should confirm whether a pass-through entity tax election still makes sense.
AMT Is Back in the Conversation
The AMT exemption now begins to phase out at $500,000 for individuals and $1 million for married couples, and it phases out twice as fast as it did under prior law. Executives holding incentive stock options should run the numbers before exercising, since the combination can push effective rates well above the headline bracket.
Retirement Contributions and the New Roth Catch-Up Rule
The 2026 employee deferral limit is $24,500, with an $8,000 catch-up for those 50 and older and a special $11,250 for ages 60 through 63. A significant change applies to higher earners. Anyone whose FICA wages from their employer exceeded $150,000 in 2025 must now make catch-up contributions as Roth. If a plan offers no Roth option, those catch-up contributions are unavailable altogether. Many large employer plans added Roth features ahead of 2026 to avoid exactly this outcome, so it’s mostly a concern with smaller employer plans. It is worth confirming with payroll that elections were updated correctly. HSA limits rose to $4,400 for individuals and $8,750 for families, plus a $1,000 catch-up at 55.
Required minimum distributions (RMD), from IRAs remain due by December 31 for those 73 and older, and a year with lower income may still be the right moment for a partial Roth conversion. If you inherited an IRA after 2020, and you are not the surviving spouse, you will likely need to take an RMD.
Smaller Items Worth a Look
The annual cap on tax-free 529 withdrawals for K-12 expenses rises to $20,000, and owners of specified service businesses benefit from a wider QBI phase-in range.
The common thread this year is that timing and income levels matter more than ever. A year-end review with your CPA and Wealth Manager is the best way to make sure each move works well within the context of your overall plan.
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