---
title: "Finish 2026 Strong with Year-End Tax Planning Strategies for Individuals"
date: 2026-10-23
author: "Gina Khawam"
featured_image: "https://beachfleischman.com/wp-content/uploads/2026/10/2026-1022-Finish-2026-strong-with-these-year-end-tax-planning-strategies_BLOG.avif"
categories:
  - name: "SALT"
    url: "/category/tax-bites/salt.md"
  - name: "Tax Bites"
    url: "/category/tax-bites.md"
tags:
  - name: "OBBBA"
    url: "/tag/obbba.md"
  - name: "tax planning"
    url: "/tag/tax-planning.md"
  - name: "year-end"
    url: "/tag/year-end.md"
---

# Finish 2026 Strong with Year-End Tax Planning Strategies for Individuals

Tax filing season may still be months away, but decisions you make before January 1, 2027, could affect your 2026 federal income tax liability. Year-end [planning](https://beachfleischman.com/tax/tax-planning-and-preparation-phoenix-tucson-arizona-accountants-cpas/) is especially important because several provisions of the One Big Beautiful Bill Act (OBBBA) take effect in 2026, while taxpayers may still be adjusting to changes that began last year.

The right approach depends on your income, investments, deductions, and overall financial situation. Here are several areas to review before year-end.

## Standard deduction vs. itemizing

You can either itemize eligible deductions on Schedule A or claim the standard deduction for your filing status. Itemizing can reduce your tax when eligible deductions exceed the standard deduction, although it can make filing more complex.

For 2026, the standard deduction is:

- $16,100 for single filers and married couples filing separately
- $24,150 for heads of household
- $32,200 for married couples filing jointly

Taxpayers age 65 or older or blind can claim an additional standard deduction of $2,050, or $1,650 per spouse if married. The additional amount doubles for an individual who is both age 65 or older and blind.

Some temporary OBBBA provisions may make itemizing more useful for certain taxpayers. High-income taxpayers should also note a new limit beginning in 2026. For taxpayers in the 37% tax bracket, the value of itemized deductions is effectively limited to 35 cents per dollar rather than 37 cents.

## Review the new senior deduction

Through the 2028 tax year, taxpayers who are age 65 or older by year-end may qualify for an additional $6,000 senior deduction. Joint filers may qualify for $12,000 when both spouses are eligible.

This deduction is available whether you itemize or take the standard deduction, and it is separate from the existing additional standard deduction for older taxpayers.

The senior deduction begins to phase out when modified adjusted gross income (MAGI) exceeds $75,000 for single filers or $150,000 for joint filers. It is reduced by 6% of MAGI above the applicable threshold. Married taxpayers must file jointly to qualify, and each eligible person must have a valid Social Security number.

If your MAGI may exceed the threshold, year-end planning could help. Depending on your circumstances, options may include adjusting taxable retirement plan distributions after satisfying any required minimum distribution, increasing retirement plan contributions if you are still working, or using investment loss harvesting.

## Understand the charitable giving changes

Beginning in 2026, taxpayers who do not itemize can deduct up to $1,000 of qualifying cash donations, or $2,000 for joint filers. In general, eligible gifts must be made directly to qualifying public charities. Donations to donor-advised funds, most private foundations, and noncash contributions do not qualify for this deduction.

Cash donations can include gifts made by cash, check, debit or credit card, payment app, or payroll deduction. Keep the required records. Donations under $250 must be supported by a bank record, receipt, or written communication from the charity. Donations of $250 or more must be substantiated by the charity.

For taxpayers who itemize, another change begins in 2026: only charitable contributions above 0.5% of adjusted gross income (AGI) are deductible. For example, with a 2026 AGI of $100,000, the first $500 of charitable contributions is not deductible under this rule. Amounts excluded by this floor generally cannot be carried forward unless the taxpayer also has contributions above the applicable percentage-of-AGI deduction limits.

These rules may make “bunching” charitable contributions into a single tax year worth considering. The benefit depends on your income, other deductions, and timing of your gifts.

## Consider the higher SALT cap

The OBBBA temporarily increased the [state and local tax (SALT)](https://beachfleischman.com/tax/state-local-tax-salt-services/) deduction limit through 2029. For 2026, taxpayers who itemize may deduct up to $40,400, or $20,200 for married taxpayers filing separately.

Eligible expenses include state and local real estate taxes, qualifying personal property taxes, and either state and local income taxes or general sales taxes, but not both.

For 2026, the deduction cap is reduced by 30% of MAGI above $505,000, or $252,500 for separate filers. However, the cap cannot fall below $10,000, or $5,000 for separate filers. The SALT cap is scheduled to return to $10,000, or $5,000 for separate filers, in 2030.

If your SALT expenses are below the applicable cap, review whether eligible tax payments can appropriately be made before year-end. For example, property taxes already assessed or eligible state estimated income tax payments may affect your 2026 deduction.

## Evaluate tax loss harvesting

If you hold underperforming investments in a taxable portfolio, selling them before year-end may generate capital losses that can offset capital gains you have already recognized.

When capital losses exceed gains, you generally can deduct up to $3,000 of the excess against ordinary income, or $1,500 for married taxpayers filing separately. Unused losses generally carry forward to future tax years.

Loss harvesting may also reduce exposure to the 3.8% net investment income tax (NIIT). The NIIT applies to some or all net investment income when MAGI exceeds $200,000 for single filers, $250,000 for joint filers, or $125,000 for married taxpayers filing separately.

Be careful with the wash-sale rule. In general, a loss deduction is disallowed when substantially identical securities are purchased within 30 days before or after the sale. The rule may also apply to purchases by a spouse or through an IRA. In many cases, a disallowed loss is added to the basis of the replacement securities, which defers rather than eliminates the potential tax benefit.

## Plan before year-end

The end of 2026 gives taxpayers an opportunity to review how new OBBBA provisions interact with established planning strategies. The most useful approach will depend on your individual circumstances.

BeachFleischman can help you review your income, investments, deductions, and planning opportunities so you can make informed decisions for 2026 and beyond. [**Contact us**](#contact) to discuss your circumstances and develop a year-end tax strategy.

## Frequently Asked Questions

### What is the standard deduction for 2026?

For 2026, the standard deduction is $16,100 for single filers and married couples filing separately, $24,150 for heads of household, and $32,200 for married couples filing jointly. Additional standard deductions may apply to taxpayers who are age 65 or older or blind.

### Who may qualify for the new senior deduction?

Through the 2028 tax year, taxpayers who are age 65 or older by year-end may qualify for an additional $6,000 deduction, or $12,000 for joint filers when both spouses qualify. The deduction begins to phase out when MAGI exceeds $75,000 for single filers or $150,000 for joint filers. Married taxpayers must file jointly to qualify, and each eligible individual must have a valid Social Security number.

### Can taxpayers who do not itemize deduct charitable gifts in 2026?

Yes. Beginning in 2026, nonitemizers can deduct up to $1,000 in qualifying cash donations, or $2,000 for joint filers. In general, the donation must be made directly to a qualifying public charity and meet documentation requirements.

### What is the SALT deduction cap for 2026?

For 2026, taxpayers who itemize may deduct up to $40,400 of eligible state and local taxes, or $20,200 for married taxpayers filing separately. The cap is reduced for taxpayers whose MAGI exceeds specified thresholds, but it cannot fall below $10,000, or $5,000 for separate filers.

### How can tax loss harvesting affect 2026 taxes?

Selling underperforming taxable investments may create capital losses that offset recognized capital gains. If losses exceed gains, taxpayers generally can deduct up to $3,000 against ordinary income, or $1,500 for married taxpayers filing separately, and carry unused losses forward. The wash-sale rule can limit a current loss deduction when substantially identical securities are purchased within 30 days before or after the sale.

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