Key Takeaways
- The 2026 401(k) limit is $24,500 ($8,000 catch-up at 50+, $11,250 'super' catch-up at ages 60-63); the IRA limit is $7,500 ($1,100 catch-up).
- RMDs now start at 73 (born 1951-1959) or 75 (born 1960 or later) under SECURE 2.0 - not the old 70½ rule. QCDs are still available starting at 70½, up to $111,000 per person in 2026.
- A permanent new non-itemizer charitable deduction returns in 2026: $1,000 single / $2,000 married filing jointly for cash gifts, even without itemizing.
- Itemizers face a new 0.5% of AGI floor on charitable deductions starting in 2026 - only giving above that threshold counts.
- The 2026 gift tax annual exclusion is $19,000 per recipient ($38,000 for married couples splitting gifts).
- Capital losses still offset up to $3,000 of ordinary income per year ($1,500 married filing separately), with unused losses carried forward indefinitely.
A few years back I ended up owing taxes when I filed my return — a tax liability I could have avoided or shrunk if I’d made a few moves earlier in the year. That’s still the core lesson here: most of the strategies below only work if you act before December 31, not after.
Avoiding a tax liability (line 37 on Form 1040) also keeps you clear of the underpayment penalty on line 38 — what I think of as a tax on your taxes. The moves below are simple, mostly good financial habits on their own, and things you can put in place today.
401(k)/IRA Contribution Boost
This is usually the easiest, most effective lever: every dollar you put into a traditional 401(k) or IRA lowers your taxable income (AGI) for the year, and the growth inside the account isn’t taxed until withdrawal.
For 2026, the 401(k) employee deferral limit is $24,500, up from $23,500 in 2025. The regular catch-up contribution for those 50 and up is $8,000, and if you’re age 60 to 63 specifically, SECURE 2.0 gives you a bigger “super” catch-up of $11,250 instead.
See the full 401(k), 403(b) & TSP contribution limit rules for more on how these limits work across employer plans. IRA contribution limits are rising too — $7,500 for 2026 (up from $7,000), plus a $1,100 catch-up if you’re 50 or older.
| Account | 2026 Base Limit | Catch-Up (50+) | Catch-Up (Age 60–63) |
|---|---|---|---|
| 401(k) / 403(b) | $24,500 | $8,000 | $11,250 |
| Traditional/Roth IRA | $7,500 | $1,100 | — |
Example: Mark, 61, has been contributing the standard amount to his 401(k) all year. Because he’s in the 60–63 window, he can add the $11,250 super catch-up on top of the $24,500 base — $35,750 total — cutting his taxable income by that same amount if it all goes in pre-tax.
One wrinkle worth knowing about: starting in 2026, if you earned more than $150,000 in wages from your employer last year, any catch-up contributions you make must go into the Roth (after-tax) side of the plan rather than pre-tax — so higher earners won’t get the immediate tax-bill reduction from catch-up dollars specifically, even though the retirement savings benefit remains.
Itemize to Claim More Deductions
Rather than automatically taking the standard deduction, run the numbers on itemizing if you have a mortgage, high medical expenses, or significant charitable giving. For 2026, the standard deduction is $16,100 (single/MFS), $24,150 (head of household), and $32,200 (married filing jointly) — high enough that itemizing only pays off if your deductions clear that bar by a meaningful margin.
Most leading tax software will run both calculations automatically and default you to whichever gives the bigger refund.
Decrease Your Paycheck Withholding — Carefully
A life event — buying or selling a house, a new job, a kid heading to college — is the most common trigger for withholding that no longer matches your actual tax situation. Use the IRS withholding estimator or last year’s return to check that the right amount is coming out of each paycheck.
The goal isn’t zero refund at all costs — it’s matching withholding to what you’ll actually owe, so you’re not handing the IRS an interest-free loan all year or facing a surprise bill in April.
Required Minimum Distributions and Qualified Charitable Distributions
If you’re taking RMDs, get the age right — this trips people up constantly. Under SECURE 2.0, if you were born between 1951 and 1959, your RMDs start at age 73. If you were born in 1960 or later, that starting age moves to 75. Missing your first RMD, or taking it late, can trigger a real penalty, so check the current rules against your own birth year rather than assuming “70½” like the old rule.
If you’re 70½ or older (note: the age to start making QCDs is still 70½, even though RMDs themselves now start later), a Qualified Charitable Distribution lets you send money directly from your IRA to a charity and have it count toward your RMD without it ever showing up as taxable income. The 2026 QCD limit is $111,000 per person ($222,000 for a married couple who both qualify) — up from $108,000 in 2025.
You can’t double-dip: a QCD isn’t also deductible as a charitable contribution on Schedule A.
Capital Gain Loss Tax Deduction
If part of your portfolio is underwater, selling those positions can offset gains elsewhere and, beyond that, offset up to $3,000 of ordinary income ($1,500 if married filing separately) — with any unused loss carried forward to future years indefinitely. Check your brokerage’s realized/unrealized gains report before December 31 to see what’s worth harvesting. See the full capital gains rate and NIIT breakdown for how short- versus long-term treatment affects the math.
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Charitable Giving Got More Complicated Under the OBBB — In a Good Way for Some Filers
This is the section that changed the most since I last touched this post. The old $300/$600 non-itemizer charitable deduction from the COVID stimulus era expired years ago — but starting with the 2026 tax year, a new permanent version is back under the One Big Beautiful Bill (OBBB): a $1,000 (single) / $2,000 (married filing jointly) deduction for cash gifts to qualified charities, available even if you take the standard deduction. It’s a fixed dollar amount, not indexed to inflation.
If you itemize instead, there’s a new catch for 2026: a 0.5% of AGI floor on charitable deductions. Only the portion of your giving that exceeds 0.5% of your AGI is deductible.
Example: Sarah has an AGI of $200,000 and donates $3,000 to her church this year. Her floor is $1,000 (0.5% of $200,000), so only $2,000 of that gift is actually deductible if she itemizes — but if she instead takes the standard deduction, she can claim the flat $1,000 non-itemizer deduction regardless.
Remember that any charitable donation, regardless of amount, needs a bank record or written acknowledgment from the charity showing its name, the date, and the amount to survive an audit.
Gift Tax Exclusion
If you’re planning year-end gifts to family, the annual federal gift tax exclusion for 2026 is $19,000 per recipient ($38,000 for a married couple splitting gifts) — unchanged from 2025, after climbing from $18,000 in 2024. Give more than that to any one person and you’ll likely need to file Form 709, even though no actual gift tax is due until you exceed your much larger lifetime exemption (currently $15 million).
Common Issues to Watch Out For
I get questions about this cluster of moves every year, so a few things worth flagging directly:
- Confusing the RMD start age with the QCD start age. They’re not the same anymore. RMDs start at 73 or 75 depending on your birth year; QCDs are available starting at 70½.
- Assuming the standard/itemize choice from a few years ago still applies. With the standard deduction climbing every year, a lot of former itemizers no longer clear the bar — rerun the math instead of defaulting to habit.
- Missing the new non-itemizer charitable deduction because it “sounds like” the expired COVID one. This one’s permanent and separate — don’t assume it’s gone just because the 2021 version was temporary.
- Not accounting for the 0.5% AGI floor when planning a big itemized charitable gift. High earners making large gifts should run the floor math first so they’re not surprised by a smaller-than-expected deduction.
- Waiting until December to act. Almost everything on this list — retirement contributions, tax-loss harvesting, charitable gifts — is far easier to execute with a few months of runway than in the last week of the year.
Looking Ahead: 2027 Outlook
Contribution limits, the standard deduction, and the gift tax exclusion all adjust for inflation each year, typically announced by the IRS in the October–November window before the tax year begins. Based on recent inflation trends, I’d expect modest increases across the board for 2027 — a few hundred dollars on 401(k)/IRA limits, and a similar incremental bump to the standard deduction — rather than another structural change like the OBBB charitable rules.
I’ll update this page once the IRS makes the 2027 figures official later this year.
