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Navigating Tax Changes: Strategies for 2026 and Beyond – What To Know!

(photo: Alaska Wealth Advisors)

As tax laws change it’s smart to adjust your financial strategies.

Plan Ahead for Changes in Gift and Estate Tax Exemptions

Vinay Navani from WilkinGuttenplan advises early estate planning to manage upcoming reductions in gift and estate tax exemptions by 2026, according to the report of Merrill.

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(photo: Kiplinger)

Strategies for Maximizing Tax Savings and Financial Efficiency

Use tax-loss harvesting to offset capital gains with underperforming investments. This strategy can lower taxable income by up to $3,000 annually and position you for future market recoveries.

For remote workers, track workdays in different states or countries to handle residency tax implications and comply with local laws.

Maximize contributions to retirement plans like 401(k)s or IRAs to boost retirement savings and reduce taxable income, especially with recent increases in contribution limits.

Convert traditional IRAs to Roth IRAs during market downturns for potential tax-free distributions in retirement.

Invest in tax-efficient strategies like municipal bonds to shield income from federal taxes, particularly beneficial for high earners subject to the Net Investment Income Tax.

Fund a 529 education savings plan to gift education funds without federal gift taxes, aligning investments with educational goals for optimized tax benefits.

Manage healthcare costs with HSAs and health FSAs, allowing deductible or pretax contributions for medical expenses, with HSAs offering flexibility in carrying over unused funds.

Consider federal tax credits for clean energy investments, such as electric vehicles and energy property installations, to reduce tax liabilities and promote sustainable practices.

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Seek personalized advice from tax professionals to tailor these strategies to your financial circumstances, ensuring you optimize your tax position and retain more income.

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