From Complexity to Clarity: Your Guide to the 2026 Tax Season

Tax season brings no shortage of advice—but most of it covers the same ground without helping you figure out what actually aligns with your life.

This year is different—a comprehensive tax law enacted by Congress in July 2025, known as the One Big Beautiful Bill Act (OBBBA), reshaped the tax planning landscape. Some laws have taken effect in 2025 and others are starting in 2026. As a result, tax-timing has never been more important when you're deciding which moves to make for this tax season.

This guide covers these key areas:

• Which OBBBA rules apply in 2025 vs. 2026

• The most important tax deadlines and contribution changes

• How to know when specific tax strategies fit your situation

• What to avoid this year given the new tax rules

Let's dive in.

Get Matched Now

What Changed this Tax Season

The OBBBA made many tax rules and deductions permanent—but not all the changes happened at once. Some took effect earlier in 2025, while others won’t start until January 2026. Understanding which is which helps you figure out whether a tax strategy still makes sense or if the window has passed.

Here's a quick look at the key changes and when they took effect:

In other words, what worked last year might not align with your situation this year—and vice versa.

Key Tax Planning Deadlines and Contribution Limits

Retirement Account Contributions

Contribution limits shifted slightly for 2025, and catch-up provisions got more generous. If you're 50 or older, you can contribute extra to your retirement accounts beyond the standard limits. For instance, if you're between 60 and 63, you now have access to a "super catch-up" that allows you to contribute more than any other age group:

One important distinction: workplace plan contributions must be made by December 31, while IRA contributions can be made until the April tax filing deadline.

Required Minimum Distributions (RMDs)

Once you reach a certain age, the IRS requires you to withdraw a minimum amount from your retirement accounts each year—this is called a required minimum distribution, or RMD. The rules changed recently—here's what you need to know: 

• If you're 73 or older (or 75+ if born in 1960 or later), RMDs apply to you

• Missing an RMD triggers a 25% penalty on the amount you should have withdrawn 

• The percentage you're required to take increases with age: 3.77% at 73, 4.95% at 80 and 8.2% at 90

• If you started taking RMDs before 2023, you'll continue on the schedule you're already on

Annual Gift Tax Exclusion

You can gift up to $19,000 per person each year ($38,000 for married couples) without triggering gift tax implications. However, this doesn’t mean you don’t have to file anything. Additionally, unused amounts don't roll over—if you don't use this year's exclusion, it's gone.

Tax Strategies: When They Fit and When They Don't

Roth IRA Conversions

A Roth IRA conversion moves money from a traditional IRA (where you haven't paid taxes yet) to a Roth IRA (where withdrawals are tax-free in retirement). The tradeoff is straightforward: you pay income tax on the converted amount now.

The core question is whether you want to pay taxes now or later—and which approach aligns best with your long-term goals.

When you should consider it:

• You're in a lower tax bracket temporarily (for example, retired but not yet taking Social Security or RMDs)

• You can pay conversion taxes from funds outside your retirement accounts

• You want to reduce future required withdrawal amounts

When it doesn't fit:

• You don't have money outside the IRA to cover the tax bill

• Your heirs are in a lower tax bracket than you

• The conversion would trigger higher Medicare premiums or phase out other deductions (see tax changes table)

Charitable Gift Timing

When accelerating gifts fits:

• Your itemized deductions are close to the standard deduction threshold

• You're in the 37% bracket (because the value of your deductions is now capped at 35%)

• You want to avoid the 0.5% AGI floor that now applies to charitable deductions

When it doesn't:

• You won't exceed the standard deduction even with larger gifts

• You're a non-itemizer who can use the new $1,000/$2,000 deduction

• You're using a donor-advised fund, which already gives you flexibility on timing

For context: if your adjusted gross income is $200,000+, the new minimum means the first $1,000 of charitable gifts provides no deduction.

Qualified Charitable Distributions (QCDs)

A QCD lets you donate directly from your IRA to a qualified charity. The donation counts toward your RMD but doesn't get added to your taxable income—a meaningful distinction for people trying to manage their tax bracket or Medicare premiums.

When giving more this year makes sense:

• Bunching your gifts into one year would help you itemize deductions instead of taking the standard deduction

• You want to get full value before the new rule begins which only counts gifts above 0.5% of your income

• You're 70½ or older with IRA assets and want to support charitable causes

When it doesn't:

• Giving more won't lower your taxes because you don't have enough deductions to itemize

• You don't itemize and can use the new $1,000/$2,000 deduction instead

• You use a donor-advised fund, which already lets you time your gifts flexibly

Additionally, you can make a one-time QCD of up to $54,000 to establish a charitable gift annuity—an arrangement that provides income for life, with the remainder going to charity.

2026 Tax-Loss Harvesting

Tax-loss harvesting means selling investments that have declined in value to "realize" the loss. You can then use that loss to offset gains from other investments—or up to $3,000 in ordinary income per year.

When it fits:

• You have investment gains you'd like to offset

• You can reinvest in similar (but not identical) assets to maintain your broader investment strategy

When harvesting gains fits instead:

• You have unused capital loss carryforwards from previous years

• You're in the 0% long-term capital gains bracket

Wash-sale rules prevent you from repurchasing "substantially identical" securities within 30 days. However, some investors work around this by buying new shares first, waiting 31 days, then selling the original lot.

For those interested in how a financial advisor can help with tax planning, and other key strategies, read our guide “6 Ways to Approach Year-End Tax Planning”.

Frequently Asked Questions About 2026 Tax Planning

What's the deadline for retirement contributions? December 31st for workplace plans like 401(k)s and 403(b)s. IRAs give you until the April tax filing deadline.

Do I have to take an RMD? If you're 73 or older (or 75+ if born in 1960 or later), you have to take an RMD by December 31st each year. Missing it triggers a 25% penalty.

Is it better to itemize or take the standard deduction? Whichever gives you a larger deduction. For 2025, the standard deduction is $15,750 (single) or $31,500 (married filing jointly).

What changed with charitable giving this tax season? Two things. First, there's now a minimum before your gifts count—only the amount above 0.5% of your income is deductible. For example, if you earn $200,000, your first $1,000 in gifts doesn't count toward a deduction. Second, if you don't itemize, you can now deduct up to $1,000 (or $2,000 for married couples) in cash gifts—that wasn't available before.

What happened to energy credits? Both the Energy Efficient Home Improvement Credit and Residential Clean Energy Credit expire after December 31, 2025.

Should I use the new deductions for tips and overtime? If you qualify—but income phase-outs start at $150K for single filers and $300K for joint filers. If you're above those thresholds, they won't apply.

The Aligned Perspective: 2026 Tax Planning

The most useful tax strategies aren't the ones that sound impressive—they're the ones that fit how you're actually building your financial life.

That means thinking beyond individual deductions and considering how your tax approach connects to your retirement timeline, your charitable intentions, and your family's goals. The technical moves matter, certainly, but they matter most when they're part of a bigger picture.

At Datalign, we connect you with an advisor who thinks this way—professionals who see tax planning as one piece of a larger conversation, not a checklist to run through once a year.

Simple, strategic, and designed to give you clarity as you grow.