If you haven’t begun your 2026 tax planning yet, it’s a great idea to start now.
Tax planning allows you to save money and avoid unpleasant surprises when the filing season arrives. By being fully prepared and understanding your tax responsibilities, you can have all the tools to minimize losses and maximize the tax benefits that you’re eligible for.
Below are our 2026 tax planning tips that can help you understand more about how crucial tax planning is to setting you up for financial success.
Why 2026 Tax Planning Starts Now
Dealing with taxes is not something you want to leave until the last minute.
Engaging in tax preparation early for the upcoming 2026 will help you avoid tax problems, as well as identify opportunities to save and grow your finances.
1. Adjust Your Withholding and Estimated Payments
The first 2026 tax planning tip is to adjust withholding and estimated payments to prevent penalties and ensure you pay as you should.
Start by reviewing your 2025 income projections and make adjustments according to life changes. For example, if you expect a raise at your job or have a child in 2026, these instances will have an impact on your tax liability.
Use the IRS Tax Withholding Estimator to calculate the right withholding based on your income, deductions, and credits.
Next, maximize cash flow and balance withholding so you’re not giving the IRS an interest-free loan that ties up your funds when they could be used for savings, investments, or expenses.
Check your 2025 refund or balance due. If you received a large refund, you’re likely over-withholding. Adjust your W-4 to reduce withholdings and keep more money in your paycheck throughout 2026.
2. Maximize Retirement Contributions
2026 Contribution Limits
Part of your 2026 tax planning should include contributing to retirement accounts such as 401(k)s, Roth IRAs, and traditional IRAs. Contributions to these retirement accounts can reduce your taxable income and grow your fund tax-deferred or tax-free.
For 401(k) plans, the total employee contribution limit for those under 50 will increase from $23,500 in 2025 to $24,500 in 2026, and the catch-up contribution limit will increase from $7,500 in 2025 to $8,000 in 2026.
As for traditional and Roth IRAs, contribution limits will increase from $7,000 in 2025 to $7,500 in 2026. The catch-up contribution limit will rise from $1,000 in 2025 to $1,100 in 2026.
Tax-Deferred Growth and Deductions
The funds you contribute to a Traditional 401(k), 403(b), or deductible Traditional IRA are subtracted from your taxable income for the year. This means you pay less in taxes now, and the money grows tax-deferred until withdrawal in retirement.
Now, how do you decide which accounts to contribute to: Roth or traditional contributions? While both accounts can help you save, they work differently on taxes. For example, contributions to traditional 401(k) s and IRAs are typically made with pre-tax dollars, while Roth IRAs provide tax-free growth and tax-free withdrawals.
3. Plan for Capital Gains and Investment Income
Investments can create a big tax bill if you’re not careful, but with tax planning, you can control how much you owe, or even wipe out the tax entirely.
First, you want to harvest gains and/or tax-loss harvest before the year ends. Harvesting tax loss occurs when selling an investment at a loss to offset taxable gains.
In other words, if you have investments that have lost value, you can sell them to cancel out those gains. IRS tax amount = Gains – losses. So, for example, if you sold a stock and made $15,000 in gains, and sold another that’s down $13,000, you owe a tax of $2,000.
4. Take Advantage of Tax Credits and Deductions
Common 2026 Tax Credits
Tax credits are one of the most effective tools for reducing your 2026 tax liability. Unlike deductions, which simply lower the amount of income subject to tax, credits reduce your tax bill dollar for dollar.
Several tax credits, including the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC), and education credits, are refundable, meaning that if they exceed what you owe, the IRS will send you a refund for the difference.
Child Tax Credit: Helps families with children under 17 to get a tax break. To qualify, the child must have a social security number, have resided with you for more than half of the tax year, be claimed as a dependant on your return, and meet several other criteria.
Earned Income Tax Credit: Allows low to moderate-income earners to get a refundable credit for their earned income from jobs and self-employment. In 2026, the maximum Earned Income Tax Credit (EITC) is $8,231 for qualifying taxpayers with three or more qualifying children.
Education Credit: Covers the costs of college. The two types of education credits are: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).
Lastly, don’t overlook itemized deductions such as medical expenses, charitable contributions, and mortgage interest. Track and evaluate all records, and if the total qualifying expenses exceed the standard amount, itemize to save more.
Conversely, if your itemized expenses are low (e.g., no big medical bills or donations), take the standard deduction; it’s simpler and often bigger.
5. Meet with a Tax Attorney Early
If you have any doubt or confusion about how to go about 2026 tax planning, meet with a tax attorney with the right expertise who can help you not just plan, but deal with complex matters like audits, business structures, estate planning, and other IRS issues, to ensure you’re tax obligations are done right.
Remember that working on taxes requires due diligence, accuracy, and effective communication to produce the result you want, which is conducive to your financial success.
In contrast, any errors or discrepancies on your tax report will result in tax issues and dealing with the IRS.
Final Thoughts on 2026 Tax Planning
Being successful in dealing with taxes requires planning and strategic execution. With early tax planning, you give yourself more time to look at your finances and tax obligations.
If you require assistance with tax planning or other tax-related matters, please do not hesitate to contact Greenberg Law Group.
2026 Tax Planning Questions
What is the most important part of 2026 tax planning?
The goal of tax planning is to get everything in order ahead of time for what’s to come. Starting your tax planning early allows you to prepare and avoid surprises, which can cause stress and more complex problems.
When should I start planning my 2026 taxes?
You should start planning your 2026 taxes as soon as possible, certainly before the end of 2025. The earlier you begin, the more time you will have to complete all of your taxes and be ready to face the new year with ease and confidence.
