Tax Strategies for Individuals

Max out tax-advantaged retirement accounts

Contributions reduce your taxable income today (traditional accounts) or grow tax-free for decades (Roth accounts). The 2026 limits:

• 401(k)/403(b): $23,500 regular · $31,000 if age 50+ (catch-up) · $34,750 for ages 60-63
• Traditional or Roth IRA: $7,000 · $8,000 if age 50+
• HSA (with high-deductible health plan): $4,300 single · $8,550 family · +$1,000 if age 55+
• Backdoor Roth: high-earners phased out of direct Roth can contribute via a nondeductible traditional IRA + immediate conversion

Harvest tax losses (and gains) strategically

Selling losing positions in a taxable account offsets gains elsewhere — up to $3,000/year of losses can offset ordinary income, with unlimited carryforward. At the other end, long-term capital gains up to the 0% bracket ($48,350 single / $96,700 MFJ in 2026) are completely tax-free — sometimes worth deliberately realizing.

Itemize only if it beats the standard deduction

The 2026 standard deduction is $15,000 single / $30,000 married. Itemize only if your combined deductible items exceed that — typically meaning significant mortgage interest, large charitable contributions, or major medical bills. Use a "bunching" strategy: concentrate two years of charitable giving into one year to clear the standard-deduction hurdle.

Don't pay penalty-and-interest on underpayment

The IRS charges a quarterly interest penalty if you don't pay enough during the year. Safe harbors that avoid the penalty: pay at least 90% of this year's tax OR 100% of last year's tax (110% if AGI > $150K). If your income spiked this year (bonus, stock vesting, home sale), check your withholding or make an estimated payment.

Charitable giving with appreciated assets

Donating appreciated stock or mutual funds directly to charity (instead of selling and donating cash) lets you deduct the full market value AND avoid the capital gains tax you would have paid on the sale. For substantial givers, a donor-advised fund can bunch multiple years of giving into one deduction year.

Roth conversions in low-income years

If you have a year with unusually low income (retirement transition, sabbatical, job change), converting traditional IRA money to Roth at your current low bracket can save tens of thousands in lifetime tax. We model these conversions carefully — the cost is paid now, the payoff is decades out.