Important Financial Planning Numbers For 2026
By Senior Advisor Andrew Schaetzke, CFP®.
As you look ahead to 2026, it’s easy to feel overwhelmed by all the new financial and tax updates. To make things simpler, we want to highlight the key numbers to keep on your radar this year, including:
Updated tax rates and brackets for federal income, capital gains, Social Security, and estate taxes
Changes to deductions, exemptions, and available tax credits
New contribution limits for retirement plans (401(k), 403(b), IRA, SIMPLE IRA) and Health Savings Accounts (HSAs)
Required minimum distribution (RMD) rules for tax-deferred retirement accounts
Medicare premiums and IRMAA thresholds
To support your planning, we’ve included a helpful reference guide below. And as always, our team is here to walk with you through every step of your financial journey. If any of these updates raise questions for you or your family, please reach out to us—we’re here to help.
Please click on the images below to view the PDF.
Important Disclosure Information & Sources:
This resource was created by fpPathfinder. SJS pays an annual subscription in order to license resources from fpPathfinder.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Advisory services are provided by SJS Investment Services, a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal professional or tax professional for specific advice.
6 Tax-Saving Strategies For You And Your Portfolio
For taxable investors, the following strategies may help you save money on taxes without lowering your potential investment returns.
By Senior Advisor Andrew Schaetzke, CFP® and Investment Associate Bobby Adusumilli, CFA.
Why do you invest?
Each of us has our own goals for investing. For some, we want to support our families. For others, we want to donate to charitable causes. For business owners, you want to successfully grow your business over time.
If along the way we can legally save on taxes, then all the better. All else equal, lower taxes leave us with more money to achieve our specific goals.
For taxable investors, the following strategies may help you save money on taxes without lowering your potential investment returns. As always, please consult with your tax advisor as well as other advisors before implementing these strategies.
Use Tax-Efficient Investments
Taxes are only one of the criteria that investors consider when designing their portfolios. Yet there are usually multiple investment options to choose from in whatever area you want to invest in. Particularly for mutual fund and ETF investors, when choosing between multiple investment options, the below considerations may help you save money on expected taxes without sacrificing expected return.
Invest in lower turnover mutual funds / ETFs: Because they sell less of their holdings on an annual basis, mutual funds / ETFs with lower turnover typically realize less net capital gains than mutual funds / ETFs with higher turnover, and thus are likely to pay less capital gains distributions each year.[1]
Invest in tax-sensitive mutual funds / ETFs: Some investment managers actively consider tax consequences when making investment decisions, such as selling higher cost basis positions for a particular investment or selling a comparable investment with a higher cost basis. By choosing a tax-sensitive mutual fund / ETF, you may lower your annual capital gains distributions.
Consider ETFs: Because of their structure, ETFs are typically less likely to pay capital gains distributions than similar mutual funds.[2] Therefore, ETFs are becoming an increasingly popular choice for taxable investors.[3] However, particularly for larger investors as well as lower-AUM ETFs, ETFs may not outperform similar tax-sensitive mutual funds after taxes and fees, so it is important to choose the right investment for your specific situation.
Invest Via Tax-Advantaged Accounts
There are three general types of tax-advantaged accounts:
Tax-deferred: Money you contribute to the account is not taxed, but money you withdraw in the future is subject to taxes. Examples include Traditional IRAs, Traditional 401(k)s, Traditional 403(b)s, and 457 plans.
Tax-exempt: Money you contribute to the account is taxed, but money you withdraw in the future is not subject to taxes (subject to specific rules). Examples include Roth IRAs, Roth 401(k)s, Roth 403(b)s, and 529 plans.
Tax-free: Money you contribute as well as withdraw from the account is not subject to taxes, so long as the money is used for specific purposes. While these accounts are rare, a popular tax-free account is a Health Savings Account (HSA).
All of the above tax-advantaged accounts allow investing the balances. Additionally, if you already have a Traditional IRA, Traditional 401(k), or a Traditional 403(b), you may be able to convert some or all of the account balances to a Roth account - known as a Roth conversion.[4]
Depending on your employment, income, and age, you may be able to use some combination of these tax-advantaged accounts to help you save on taxes over time.
Asset Location
If you have a combination of taxable and tax-advantaged accounts, you could invest your most tax-inefficient investments within your tax-advantaged accounts. Once you decide which tax-inefficient investments you want in your tax-advantaged accounts, you could place your highest expected-return investments into your tax-free and tax-exempt accounts, and place your lower expected-return investments in your tax-deferred accounts.
Figuring out how to rank your investments based on tax-efficiency is complicated, and is highly dependent on your income, net worth, and age. For more comprehensive information on asset location, you can check out this webpage.[5]
Tax Loss Harvesting
Within taxable accounts, if you realize a net loss on an investment position, you are able to use that net loss amount to offset any current or future realized capital gains (subject to the wash-sale rule).[6] Additionally, if you have extra net capital losses at the end of the year, you may be able to offset up to $3,000 in federal income for this and potentially future years.[6] However, it’s important to emphasize that tax loss harvesting involves tax deferral, not tax avoidance.
If you want to learn more about tax loss harvesting, you can read our article on harvested losses.
Analyze Your Withdrawal Order
If you have a mix of taxable and tax-advantaged investment accounts, then you are subject to various withdrawal limitations and tax consequences. If you are able to selectively withdraw from each of these accounts over time, you may be able to pay lower your taxes in the short-term while allowing more time for your investments to grow.
Some general rules you can consider for how to generate cash from your investments:
First use the distributions - dividends, interest income, capital gains distributions - from your taxable accounts.
If you are age 72 or older, use the required minimum distributions (RMDs) from your relevant tax-advantaged accounts.
Within taxable accounts, sell positions that are subject to long-term capital gains taxes.
Within the taxable accounts, sell positions with higher cost bases.
Gifting and Charitable Donations
The ultimate goal of saving on taxes is to have money to accomplish our goals. Particularly for those who are inclined to gift money to your family or donate to charitable institutions, the below options may decrease your taxes over time.
For each member of your family, you may gift them up to $15,000 per year, via cash or investments.[8] Particularly if a family member has a lower tax bracket than you, it may be advantageous for you to gift a low cost basis investment, which could help decrease future taxes paid on that holding. For more information, you can read our article on gifting.
From your taxable accounts, you can donate cash or investments directly to a charitable institution. This can help you save on future taxes, up to federal deduction limits.[9]
As long as you are age 72 and meet the specific IRS rules, you can donate up to $100,000 annually directly from your Traditional IRA (without paying taxes) to a qualified charity through a qualified charitable distribution.[10]
Conclusion
While each of the above strategies may help, combining some or all of these strategies could significantly improve your investment portfolio over time, leaving you with more money to accomplish your goals. As always, please consult with your tax advisor as well as other advisors before implementing these strategies. If you have any questions on how you can incorporate the above strategies in your portfolio, feel free to reach out to us.
Important Disclosure Information & Sources:
[1] “Turnover Definition“. Will Kenton, 14-Jul-2020, investopedia.com.
[2] “Do ETFs Generate Capital Gains for Shareholders?“ Andriy Blokhin, 23-Sep-2021, investopedia.com.
[3] “The Future of ETFs“. Irene Huhulea, 23-Aug-2021, investopedia.com.
[4] “Roth IRA Conversion“. Julia Kagan, 23-May-2021, investopedia.com.
[5] “Tax-efficient fund placement“. Bogleheads, bogleheads.org.
[6] “Topic No. 409 Capital Gains and Losses“. IRS, irs.gov.
[7] “6 tax-saving strategies for smart investors“. Jessica McBride, 18-Feb-2021, vanguard.com.
[8] “Frequently Asked Questions on Gift Taxes“. IRS, irs.gov.
[9] “Charitable Contribution Deductions“. IRS, irs.gov.
[10] “IRA FAQs - Distributions (Withdrawals)“. IRS, irs.gov.
There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.
Statements contained in this article that are not statements of historical fact are intended to be and are forward looking statements. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice. This material has been prepared for informational purposes only.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
Suggested Reading
Tax Smart Considerations Before Year-End
In collaboration with your SJS Advisor and other trusted professionals, here are some tax smart things you can consider before year-end.
By SJS Investment Services Chief Investment Officer Tom Kelly, CFA.
“Death, taxes and childbirth! There's never any convenient time for any of them.” ― Margaret Mitchell, Gone with the Wind.[1]
While there never seems to be a good time to talk about taxes, the topic has been unavoidable this year. With a $large infrastructure plan in the works, the House Ways and Means Committee recently introduced a draft bill advancing many tax proposals, such as raising the top long-term capital gains tax rate from 20% to 25%, a potential net investment income tax of 3.8%, and increasing the top individual federal income tax rate from 37% to 39.6%.[2][3] While none of these are set in stone, the right time to talk about taxes is now!
In collaboration with your SJS Advisor and other trusted professionals, here are some tax smart things to consider before year-end:
Tax-Deferred Contributions
Contribute the maximum amounts to tax-deferred retirement accounts - including 401(k), Individual Retirement Account (IRA), and Health Savings Account (HSA) - to reduce your taxable income.
Roth Conversions
With your SJS Advisor and trusted tax professionals, identify if there are opportunities to accelerate income into 2021 through a Roth Conversion.
Charitable Donations
Gifting of highly appreciated securities held for more than one year, either directly to a qualified charity or to a charitable fund. You could reduce taxable income and avoid realizing capital gains on those donated securities.
Estate Planning
With your SJS Advisor and trusted estate professionals, review your estate and financial plans to understand how you are positioned to achieve your financial and legacy goals
While we may have just added a few things to your to-do list, know that SJS has been reviewing opportunities on your behalf throughout the year. Using our MarketPlus Investing principles and our disciplined approach to long-term investing, we strive to manage tax-efficient portfolios by utilizing asset location (putting tax-disadvantaged investments in tax-advantaged accounts), tax-efficient investments (using mutual funds and ETFs with low capital gains distributions), and tax loss harvesting (realizing losses in order to offset future realized capital gains). We are always looking for ways to decrease your April 15th bill. Wherever taxes go in the future, we will continue to be here for YOU. All the time. Every time. At whatever time is convenient for you.
Important Disclosure Information & Sources:
[1] “Margaret Mitchell > Quotes > Quotable Quote“. Goodreads, goodreads.com.
[2] “What’s in Democrats’ $3.5 Trillion Budget Plan—and How They Plan to Pay for It“. Wall Street Journal Roundup, 09-Aug-2021, wsj.com.
[3] “How House Democrats Plan to Raise $2.9 Trillion for a Safety Net“. Emily Cochrane & Alan Rappeport, 13-Sep-2021, nytimes.com.
Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice. This material has been prepared for informational purposes only.
Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.
Suggested Reading
Charitable Giving And Tax Considerations For Year-End
In the holiday season, what can you do to still fulfill your charitable intent, while also making tax-smart investing decisions?
By SJS Managing Director Jennifer Smiljanich
As the year winds down and we get ready to close the book on 2018, there are still many things to be done. Dinners to prepare, holiday gifts to buy, wish lists to fulfill.
In the hustle and bustle of the holiday season, there are even some things that can be done with respect to your investments.
As you likely know, there is a new tax law in effect this year – officially known as the Tax Cuts and Jobs Act – that went into effect on January 1, 2018. This new law changes some of the rules pertaining to charitable giving. In our conversations with you, this topic has come up with more frequency.
The new law doesn’t change the basic rules for charitable deductions (other than increasing the deduction limit for cash contributions from 50% to 60% of your adjusted gross income). But because the law nearly doubled the standard deduction (to $12,000 for single filers and $24,000 for married filers), fewer people will benefit from itemizing deductions.
So what can you do to still fulfill your charitable intent, while also making tax-smart decisions?
Consider gifting stocks, bonds or mutual funds with a tax gain to charity in lieu of a cash donation.
If you donate the securities directly to the charity, you do not pay tax on the gain, and because you do not owe tax on the security sale, you may be able to give a larger gift. We can help you facilitate your year-end gifting, subject to custodian deadlines.
If your tax preparer determines that your deductions may no longer exceed the standard deduction amount, there may be a benefit to bundling your charitable donations.
By adjusting the timing of donations to fall within a given calendar year, you might be able to increase your total deductions over the standard deduction, and see a potential tax benefit.
The rules for qualified charitable distributions still remain, allowing people older than 70 1/2 to transfer up to $100,000 from their IRAs to charity each year, and have it count as their required minimum distribution (RMD) without being added to their adjusted gross income.
The tax-free RMD from an IRA may be of greater benefit to those who can no longer itemize. Your charitable gift isn’t included in your adjusted gross income, and therefore isn’t taxed. We can help with any final distributions yet to be made.
As always, we’re happy to work with you, and your tax professional, to get things done in a way that makes sense for you. Please contact us if you have questions!
Important Disclosure Information:
SJS Investment Services does not provide tax advice. Please consult your tax professional for specific advice. This material has been prepared for informational purposes only.