As we approach the end of 2026, here are some potential opportunities to save money on taxes depending on your unique situation. Some of these strategies call for deeper tax planning and may require working closely with your financial advisor or tax professional.
- If you own a home and use it as your primary residence, a Homestead Exemption could offer significant tax savings. For Comal County residents, check the Comal Appraisal District website>Exemptions>Homeowner Exemptions for additional requirements and information.
- For taxable investment accounts (not tax-deferred IRAs or Roth IRAs), tax-loss harvesting may be a strategy to help save money on capital gains taxes. While a lot can be done by year end, ideally, it’s best to work with your financial advisor throughout the year to take advantage of market swings, avoid wash-sale situations, understand the impact on dividend distributions and transaction fees, and make sure it aligns with your overall wealth management strategy.
- Those who anticipate their 2026 taxable income to be less than $98,900 (married filing jointly) or $49,450 (filing single) may have an opportunity for capital-gain harvesting. Below these taxable income levels, the long-term capital gains (LTCG) tax rate is 0%. And for kids with no other income, the first $2,700 of LTCG is in the 0% tax bracket.
- Ensure that your tax withholding from your employment income, retirement account distributions, or Social Security benefits is appropriate for your current circumstances to try to avoid a larger tax bill at tax time or underpayment penalties. In general, it’s financially beneficial to aim for net zero tax.
- Check that your contribution amount to an employer retirement plan aligns with your goals and maximizes any benefits or matches available to you. Also check whether contributions to a Traditional IRA or Health Savings Account (HSA), which are above-the-line tax deductions. are appropriate and beneficial for your situation.
- If your taxable income is lower this year, such as for those in early retirement, and you anticipate higher income and tax rates in the future, converting some pre-tax IRA dollars to Roth may be an option. A Roth conversion would need to be completed by year-end, and some custodians have mid-December deadlines.
- For those taking Required Minimum Distributions (RMDs) from tax-deferred accounts or an inherited Roth, verify they’ve been correctly taken by year end.
- If you have a Flexible Spending Account (FSA) through your employer, spend these use-it-lose-it dollars by the end of the year or the grace period if offered.
It’s unlikely that all these strategies would apply to your financial situation, but careful planning with ones that do apply can help reduce your 2026 tax bill.
For more information, reach out to Financial Planner and Advisor, Della Stegall, here in New Braunfels at
(830) 282-0654 or www.fruitofthevinefinancial.com.
Fruit of the Vine Financial, LLC (“FOTVF”) is a registered investment advisor offering advisory services in the States of Texas and Minnesota and in other jurisdictions where exempt. For additional information, please visit: https://adviserinfo.sec.gov/ firm CRD# 325004.
The tax planning information offered by FOTVF is general in nature, provided for informational purposes only, and should not be construed as tax advice. Always consult a tax professional regarding your specific tax situation.
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